UNITED
STATES
SECURITIES
AND EXCHANGE COMMISSION
Washington,
D.C. 20549
Form
6-K
REPORT
OF FOREIGN PRIVATE ISSUER PURSUANT TO RULE 13a-16 OR 15d-16 UNDER THE SECURITIES EXCHANGE ACT OF 1934
For
the month of April 2018.
Commission
File Number 001-38172
CHINA
INTERNET NATIONWIDE FINANCIAL SERVICES INC.
(Translation
of registrant’s name into English)
Dongsanhuan
Middle Road
#1
Building Unit 1 Room 1501 Unit 13-14,
Chaoyang
District, Beijing, People’s Republic of China 100020
Tel:
+86 010 59817999
(Address
of principal executive office)
Indicate
by check mark whether the registrant files or will file annual reports under cover of Form 20-F or Form 40-F. Form 20-F [X] Form
40-F [ ]
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(1): ____
Note
:
Regulation S-T Rule 101(b)(1) only permits the submission in paper of a Form 6-K if submitted solely to provide an attached annual
report to security holders.
Indicate
by check mark if the registrant is submitting the Form 6-K in paper as permitted by Regulation S-T Rule 101(b)(7): ____
Note
:
Regulation S-T Rule 101(b)(7) only permits the submission in paper of a Form 6-K if submitted to furnish a report or other document
that the registrant foreign private issuer must furnish and make public under the laws of the jurisdiction in which the registrant
is incorporated, domiciled or legally organized (the registrant’s “home country”), or under the rules of the
home country exchange on which the registrant’s securities are traded, as long as the report or other document is not a
press release, is not required to be and has not been distributed to the registrant’s security holders, and, if discussing
a material event, has already been the subject of a Form 6-K submission or other Commission filing on EDGAR.
China
Internet Nationwide Financial Services Inc. Announces Completion of Independent Investigation by the Special Committee of Its
Board of Directors
BEIJING,
China, April. 30, 2018 /PRNewswire/ — China Internet Nationwide Financial Services Inc. (NASDAQ: CIFS) (“CIFS”
or the “Company”), a leading financial advisory services company, today announced that the independent special committee
of the Board of Directors of the Company, comprising three independent directors of the Company, Ms. Sheve Li Tay, Mr. Buting
Yang and Mr. Hong Huang (the “Special Committee”), has completed its investigation into the allegations raised in
the report issued by Muddy Waters LLC dated December 20, 2017 (the “Report”). The Special Committee commenced its
investigation in January 2018 and was assisted by a global law firm that served as independent legal counsel and by the forensic
auditors that its counsel retained.
Summary
of Major Findings
The
Report made allegations against the Company and below is a summary of the major findings of the investigation generally keyed
to those allegations:
1.
No material inconsistency between the gross revenue in the Company’s books and records and the revenue reported in its
SEC reports
. Gross revenue in the Company’s books and records showed no material inconsistency with the gross revenue
reported in its Registration Statement on Form F-1 filed with the Securities and Exchange Commission (“SEC “) on April
17, 2017. It was determined that the Company had underreported its revenue to the PRC’s State Administration of Industry
& Commerce (“SAIC”).
2.
Loans were verified
. The loans to Beijing Ailirui Trading Co., Ltd, Xiamen Jingsu Trading Co. Ltd, Fujian Jin Xin Import
Export Trading Co. Ltd and Cai Long Ge (the “borrowers”) were in fact made and were repaid with appropriate interest.
The borrowers were not “sham” parties.
3
.
Transactions with Xiamen Beiruichen Trading Co. Ltd and Xiamen Luye Trading Co. Ltd verified
. The transactions with Xiamen
Beiruichen Trading Co. Ltd and Xiamen Luye Trading Co. Ltd have been verified and the Company reported the relevant revenue in
its SEC filings.
4.
Acquisition of Beijing Anytrust Science & Technology Co. Ltd (“Anytrust”) was a valid transaction
. The
Company asked Beijing Tianhuang Tongda Technology Co. Ltd to acquire the “big data” company Anytrust and then, for
an additional fee, sell it to the Company because the Company did not want to reveal its identity to the seller of Anytrust for
fear that the latter would demand a higher selling price for Anytrust if it knew that it was negotiating with a public company.
5.
Kashgar Sheng Yingxin Enterprise Consulting Co., Ltd. (“Kashgar SYX”)’s 2016 revenue verified
. Although
Kashgar SYX was only incorporated on December 29, 2016, its reported revenue was significant because customers of its parent,
Sheng Ying Xin (Beijing) Management Consulting Co., Ltd (“SYX”) in the latter half of 2016, replaced their contracts
entered with SYX with Kashgar SYX once Kashgar SYX was incorporated to benefit from certain preferential tax treatments. The revenue
from these customers was then booked under Kashgar SYX.
6.
The Company’s net profit margin compared
. In order to establish whether the Company’s 2016 profit margins were
plausible, the Special Committee compared the Company’s net profit margin to the net profit margin of two PRC financial
services companies listed on the NASDAQ – one had higher margin and the other, lower.
7.
Wealth products services business was sold
. The Company’s former wealth products services business, described in
the Report as a “P2P business,” was sold to a third party approximately 2 years prior to the Company’s IPO.
Accordingly, the Company did not mislead its investors by not disclosing its prior sold business.
8.
Internet Content Provider (“ICP”) license and the Company’s Variable Interest Entity (“VIE”)
structure verified
. The Company’s ICP license has been verified and its use of the VIE structure is consistent with
its strategy to pursue a line of business where foreign ownership is restricted by China’s Ministry of Commerce.
The
Special Committee recognizes that its investigation was tailored to investigate the allegations made in the Report, and was not
designed to be the equivalent of an audit conducted by the Company’s independent auditors. As a result of its investigation,
the Special Committee, on behalf of the Company, has adopted, and the management will in the near future implement, a series of
measures intended to improve the Company’s operations, compliance and internal controls. These measures include, among other
things, enhanced corporate policies and practices governing the management of acquisitions and requiring the reconciliation of
reports filed with the SAIC and reports filed with the SEC.
About
China Internet Nationwide Financial Services Inc.
Incorporated
in 2014 and headquartered in Beijing, China Internet Nationwide Financial Services Inc. provides financial advisory services,
including commercial payment advisory, intermediary bank loan advisory, and international corporate financing advisory, to meet
the financing and capital needs of its clients, comprised largely of small-to-medium sized enterprises. Beijing Anytrust Science
& Technology Co., Ltd. (“Anytrust”) is a wholly owned subsidiary of CIFS focusing on providing data infrastructure
design, big data access and analytics, and document automation for enterprises and government agencies in China. For more information
about the CIFS and Anytrust, please visit
www.cifsp.com
or
www.anytrust.cn
.
Forward
Looking Statements
This
news release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933,
as amended, and Section 21E of the Securities Exchange Act of 1934, as amended, and as defined in the U.S. Private Securities
Litigation Reform Act of 1995. These forward-looking statements can be identified by terminology such as “will,” “expects,”
“anticipates,” “future,” “intends,” “plans,” “believes,” “estimates”
and similar statements. All statements other than statements of historical fact in this press release are forward-looking statements
and involve certain risks and uncertainties that could cause actual results to differ materially from those in the forward-looking
statements. These forward-looking statements are based on management’s current expectations, assumptions, estimates and
projections about the Company and the industry in which the Company operates, but involve a number of unknown risks and uncertainties,
Further information regarding these and other risks is included in the Company’s filings with the U.S. Securities and Exchange
Commission. The Company undertakes no obligation to update forward-looking statements to reflect subsequent occurring events or
circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations
expressed in these forward looking statements are reasonable, it cannot assure you that such expectations will turn out to be
correct, and actual results may differ materially from the anticipated results. You are urged to consider these factors carefully
in evaluating the forward-looking statements contained herein and are cautioned not to place undue reliance on such forward-looking
statements, which are qualified in their entirety by these cautionary statements.
INVESTOR
RELATIONS:
China
Internet Nationwide Financial Services Inc.
Email: ir@cifsp.com
Phone: +86 10 8587 8166
Tony
Tian, CFA
Weitian
Group LLC
Email:
tony.tian@weitian-ir.com
Phone: +1 732 910 9692
SIGNATURES
Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
Date:
|
April 30, 2018
|
CHINA INTERNET NATIONWIDE FINANCIAL
SERVICES INC.
|
|
|
|
|
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By:
|
/s/
Jianxin Lin
|
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Name:
|
Jianxin Lin
|
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Title:
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Chief Executive Officer
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