At the beginning of the new year, 2024 ushered in a storm in the capital market, and seven listed companies were cusped by the China Securities Regulatory Commission and local securities regulatory bureaus for their crimes involving financial fraud. This series of stories is like a scene of market thunder, shocking.
The first to bear the brunt of the Xingyuan Environment, a piece of "Administrative Penalty Decision" made the company receive a heavy fine of up to 2 million yuan from the Zhejiang Securities Regulatory Bureau. It turned out that the subsidiaries of Xingyuan Environment were involved in financial fraud such as inflating project revenues and costs in two PPP projects in 2016 and 2017. In recent years, there have been false records in the financial data and related disclosures in the annual reports, which has made the regulators furious. For this wrong behavior, the company was ordered to make corrections, and the chief financial officer, Sun Ying, was fined 800,000 yuan, and the company also had to pay a fine of 2 million yuan.
In this trend of severe punishment, companies such as Jin Tongling, Rihai Intelligence, Jin Litai, and Yanhua Intelligence have also become the targets of administrative punishment. The storm, which involved seven companies, was all related to financial fraud. Among them, SUNSEA Intelligent was fined 4 million yuan by the Shenzhen Securities Regulatory Bureau, due to crimes such as goodwill impairment and misaccounting of equity disposal gains of subsidiaries, which had a huge impact on the total profit from 2018 to 2021, and the fine was jaw-dropping.
In this drama that shocked the capital market, Ruyi Group became the highlight. A piece of "Administrative Penalty Decision" and "Market Ban Decision" revealed the crimes of Ruyi Group, from January to June 2019, it actually transferred a huge amount of funds to the bank account of Ruyi Technology through fictitious procurement business. The non-operating capital occupation involved in this was identified as a related party transaction, and the fine was as high as 2 million yuan, and the actual controller Qiu Yafu also paid a huge price, a fine of 3.5 million yuan, and a 10-year market ban. Other relevant responsible persons are also not spared, and they will be fined in varying amounts.
This capital market storm has undoubtedly sent a wake-up call to the entire industry. The regulator's zero-tolerance attitude towards financial fraud, related party transactions and other violations demonstrates the strict discipline of the market. In the context of the current strict punishment, listed companies and related personnel urgently need to strengthen the study of first-class laws and regulations, improve the level of corporate governance, so as not to fall into the whirlpool of this storm.
Behind this capital market storm, we have seen the resolute attitude of the regulatory authorities, and they are not soft on the maintenance of market order. However, this is also a big test of corporate governance, and for listed companies, it is not only a storm of fines, but also a moment of alarm bells. How to improve corporate governance and strengthen compliance with laws and regulations is a question that every company needs to think about seriously.
At this turbulent moment, Xu Xiaoheng, an investment and financing expert, emphasized that the actual controllers, major shareholders and incumbents of listed companies should pay more attention to the study of first-class laws and regulations, be in awe of the market, and maintain a high sense of responsibility for investors. He believes that the improvement of corporate governance and compliance with laws and regulations is not only a requirement for the company itself, but also for the maintenance of the entire market order.
The lesson of this storm is profound and precious, and for the market, only by abiding by the law and compliance can it be stable in the wind and rain. It is hoped that this storm can be a shot in the arm to arouse the vigilance of more listed companies, guide them to keep the right path and the bottom line in the market, and create a healthier and more stable capital market.