The regulator has always maintained a zero-tolerance and high-pressure situation for all kinds of counterfeiting! On the evening of February 2, *ST Poten announced that due to financial fraud for 5 consecutive years, the Shanghai Stock Exchange has issued the "Prior Notice on the Proposed Termination of the Listing of Poten Environment Group Shares" to the company, and decided to terminate the listing of the company.
Since the company has received the "Administrative Penalty Decision" issued by the Beijing Securities Regulatory Bureau on February 2, according to the rules, the Shanghai Stock Exchange will make a decision on whether to terminate the company's listing within 15 trading days. This means that *ST Poten may become the first case of forced delisting in 2024 with major violations.
If the company makes a decision to forcibly terminate the listing, it will resume trading on the next trading day after the expiration of 5 trading days after the announcement of the decision to terminate the listing, and enter the delisting consolidation period, and be crowned with the "delisting" logo before the abbreviation. The trading period of the delisting consolidation period is 15 trading days. Within 5 trading days after the expiration of the delisting period, the exchange will delist the company, and the company will terminate its listing.
What are the facts of the violation?
ST Botian announced that according to the "Administrative Penalty Decision" issued by the Beijing Securities Regulatory Bureau, the company inflated or reduced its operating income and profits in a variety of ways, resulting in false records in the annual reports of 2017, 2018, 2019, 2020 and 2021, which touched the situation of forced delisting in major violations. The Beijing Securities Regulatory Bureau pointed out that after investigation, *ST Botian has the following illegal facts:
First, the main ways in which Poten Environment inflated its operating income and profits include: first, failing to account for the terminated equipment sales business in a timely manner, and offsetting the current payments caused by the inflated income by signing a false entrustment payment agreement, which involves the Hefei Qingxi Project.
The second is the failure to timely account for the projects that have been completed and settled, and to offset the current payments caused by the inflated income by signing false entrustment payment agreements, which involves EPC projects such as Yankuang Yulin's 1 million tons of coal indirect liquefaction demonstration project, sewage treatment plant and general contracting project of reuse water treatment project.
The third is to use the inspection and valuation voucher without commercial substance to confirm the progress of the project, and conceal the false increase in income by signing false creditor's rights and debts transfer agreements and entrusted payment agreements, which involve PPP projects such as the PPP project of village-level domestic sewage treatment in Leizhou City.
Five consecutive years of financial fraud
As a result of the above-mentioned matters, there were false records in the annual reports of Poten Environment in 2017, 2018, 2019, 2020 and 2021.
The specific impact is as follows: In 2017, Poten Environment inflated its operating income by 34.7 billion yuan, accounting for 1140%；Taking into account the impact of related impairments, the inflated profit is 11.8 billion yuan, accounting for 70 percent of the total disclosed profit for the current period68%。
In 2018, Poten Environment's operating income was inflated by 109.8 billion yuan, accounting for 25% of the disclosed operating income in the current period33%；Taking into account the impact of related impairments, the inflated profit was 50.1 billion yuan, accounting for 223 percent of the total disclosed profit in the current period80%。
In 2019, on the contrary, Poten Environment reduced its operating income by 2874520,000 yuan, accounting for 099%；Taking into account the impact of related impairments, the inflated profit is reduced by 11.6 billion yuan, accounting for 14% of the total disclosed profit for the current period01%。
In 2020, taking into account the impact of related impairments, the inflated profit was 4939160,000 yuan, accounting for 1190%。
In 2021, taking into account the impact of factors such as relevant impairment and investment income adjustments, the inflated profit was reduced by 24.9 billion yuan, accounting for 17% of the total disclosed profit in the current period37%。
In addition, judging from the "Administrative Penalty Decision", *ST Potian has committed huge financial fraud for many years. The Beijing Securities Regulatory Bureau warned the company and the relevant responsible persons and fined a total of 13 million yuan.
Previously, 23 consecutive boards fell to the limit
From December 11 last year to January 11 this year, *ST Potian has walked out of 23 one-word board down limits, with a cumulative decline of nearly 70%, and since January 12 to the present 16 trading days, the stock price has continued to fall after the limit, and the amplitude is huge.
On February 2, *ST Potian's share price also once walked out of the "earth and sky board", and some market participants said that this indicates that there are funds trying to lick the blood pry board to save themselves, and call on ordinary people not to follow the trend and be stupid.
Some professionals also said that investors should not be lucky about speculation and delisting in the process of participating in market investment, and should not be a "doomsday pick-up man". This kind of behavior not only harms its own interests, but also has a negative impact on the market. *The delisting of ST Poten is a kind of "clean-up" of dishonest companies in the market.
* The regulation of "teething and thorns" is unwavering. The China Securities Regulatory Commission (CSRC) has made it clear that it will continue to consolidate and deepen the normalized delisting mechanism, continue to smooth diversified exit channels, strictly implement the delisting rules, adhere to the principle of "delisting as much as possible", and severely crack down on malicious "shell" behaviors such as financial fraud and market manipulation associated with the delisting process, so as to maintain the seriousness of the delisting system.
This year, these tickets have been locked in and delisted
With the introduction of the "New Rules for Delisting" at the end of 2020, the number of A-share delistings** has increased rapidly, with 16** delisted in 2021, 42 delisted in 2022, and 44** delisted in 2023.
Among them, many of them touched on major illegal delisting, such as *ST Zeda and *ST Amethystum were found to have fraudulent issuance, and the two companies were forced to delist due to major violations.
Incomplete statistics show that since 2024, 6 companies have been locked in and delisted, in addition to *ST Potian, *ST Huayi and *ST Bolong have been delisted, *ST Oceanwide has received the exchange's delisting decision, *ST Aidi and ST Hongda have received the prior notice before the exchange's delisting decision. In addition, there are companies suspected of fraud, which are also firmly locked by the regulator. For example, the big demon stock *ST Zuojiang was recently notified of suspected major financial fraud. On January 30, the China Securities Regulatory Commission issued a notice stating that it has been preliminarily ascertained that the financial information disclosed by Zuojiang Technology in 2023 is seriously untrue and suspected of major financial fraud. The case is currently under investigation, and the facts of the violation will be ascertained as soon as possible and seriously dealt with in accordance with the law. The China Securities Regulatory Commission said that it will always take the protection of the legitimate rights and interests of investors, especially small and medium-sized investors, as the starting point and end point of all work. Financial fraud by listed companies seriously misleads small and medium-sized investors in their trading decisions, and must be severely cracked down.
According to Guo Ruiming, director of the Listing Department of the China Securities Regulatory Commission, the core of the delisting reform is to adhere to the principle of "retreating as much as possible", and at the same time retreating, it is necessary to retreat steadily, and it is not that the more withdrawals the better. In the next step, the CSRC will continue to consolidate and deepen the normalized delisting mechanism in accordance with the requirements of the reform. First, we will continue to unblock diversified exit channels, support the effective integration of resources through absorption and merger, and promote the improvement of the bankruptcy reorganization system. The second is to strictly implement the rules of delisting, adhere to the principle of "retreating as much as possible", and severely crack down on malicious "shell" behaviors such as financial fraud and market manipulation associated with the delisting process, so as to maintain the seriousness of the delisting system. The third is to resolutely prevent "retreat".
It is for investors' information only and does not constitute investment advice
Article**: Oriental Wealth Research Center).