Shenzhen-listed manufacturing and real-estate company Yinyi Co. Ltd. announced Tuesday its first annual loss since it went public through a back-door listing in 2011. The company reported a net loss of 573.4 million yuan ($85.2 million) for 2018, compared with a net profit of 1.6 billion in the previous year.

The weak data was attributed to poor operations, the acquiring of some companies which later failed to meet profit expectations, and debt defaults worth 2.4 billion yuan.

To make matters worse, some affiliate companies of Yinyi’s actual controller, billionaire Xiong Xuqiang, embezzled around 2.2 billion yuan of its funds last year, according to Yinyi’s annual report. The money could have been used to repay debts.

One of Yinyi’s former independent directors, Yu Minggui, believes the company’s internal management has “severe defects,” and says it’s uncertain whether Yinyi will get the embezzled money back. Yu resigned days before the release of Yinyi’s annual report.

Yinyi has applied to demote its shares to “special treatment” status, alerting poor financial performance and a delisting risk.

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