Several companies, including ST Jinyi, Founder Motor, and ST Dongtong, have faced penalties for falsifying financial statements, highlighting serious violations in China's capital markets.
*ST Dongtong (Securities Code: 300379) received a preliminary penalty notice from the China Securities Regulatory Commission (CSRC) on September 12, 2025, for false financial records in its annual reports from 2019 to 2022. The company was found to have inflated revenue and profits through fabricated transactions involving its subsidiary, Beijing Taice Technology. Specifically, ST Dongtong overstated revenue by RMB 61.45 million, RMB 84.85 million, RMB 125.51 million, and RMB 160.53 million in 2019–2022, respectively, while also inflating profits by RMB 52.23 million, RMB 58.77 million, RMB 79.48 million, and RMB 123.69 million. Additionally, its 2022 private placement of RMB 2.2 billion was deemed fraudulent due to misleading disclosures.
Affected investors who purchased shares between April 30, 2020, and April 14, 2025, may be eligible for compensation, pending court approval.
Meanwhile, ST Jinyi (Securities Code: 002721) was penalized for underreporting inventory impairments in 2020–2021, leading to overstated assets and profits. The company corrected these errors in April 2023. Investors who bought shares between April 30, 2021, and April 30, 2023, may file claims.
Zhejiang Founder Motor (Securities Code: 002196) was also sanctioned for improper accounting practices related to product warranties and goodwill impairment. Investors who held shares between April 29, 2019, and June 26, 2023, could qualify for compensation.
Legal experts emphasize that these cases reflect systemic breaches of market regulations, urging affected investors to seek redress.
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