On September 8, 2026, the Beijing Regulatory Bureau issued an administrative penalty decision against Da Xin Certified Public Accountants, ordering the firm to disgorge illegal income and pay fines totaling 9.8113 million yuan for failing to exercise due diligence in the annual report audits and stock issuance-related assurance services of Tonghui Information (now trading as *ST Tonghui). Four signatory certified public accountants were also penalized simultaneously. This marks another significant step in regulatory accountability for intermediary institutions following the earlier penalties imposed on Tonghui Information for financial fraud. Meanwhile, compensation claims from affected investors continue to be collected.
Where the Accountability Begins
The Beijing Regulatory Bureau's administrative penalty decision essentially found that Da Xin CPAs failed to fulfill its "gatekeeper" responsibility when auditing Tonghui Information, issuing documents containing false records. The regulator's investigation was thorough, uncovering problems in the firm's audit work on Tonghui Information's annual reports from 2018 to 2021, as well as its assurance services for stock issuance. Most strikingly, the firm issued "standard unqualified opinions" on all four years of annual reports, essentially assuring the public that everything was financially sound, when in reality it was all false. The violations included: first, issuing documents with false records; second, failing to exercise due diligence during the audit process. Additionally, the certified public accountants failed to maintain professional skepticism during audits and did not perform further audit procedures on abnormal circumstances, violating multiple auditing standards. The Beijing Regulatory Bureau ordered Da Xin CPAs to rectify its practices, confiscated business income of 2.4528 million yuan, and imposed a fine of 7.3585 million yuan. Four signatory CPAs were also fined varying amounts.
Financial Fraud Already Met With Severe Punishment
Before the auditing firm was penalized, the company itself had already faced severe enforcement action from the securities regulator. The financial fraud at Tonghui Information exhibited systematic and persistent characteristics, primarily involving fabricating business contracts and recognizing revenue either early or late. Over four consecutive years, from 2018 to 2021, the company cumulatively inflated operating revenue by more than 62 million yuan and inflated total profits by nearly 32 million yuan. These were not insignificant figures, directly rendering the prospectus for its public stock offering and the annual reports for those years entirely false, which in turn affected the quality of information disclosure at the time of its Beijing Stock Exchange listing. The actual controller, Dai Fuhao, was proposed to be fined 11.5 million yuan and was subjected to a 10-year market entry ban. However, this was not the end of the matter. On March 16, 2026, Tonghui Information announced that the company's controlling shareholder, actual controller, and board secretary were criminally detained by public security authorities on suspicion of illegally disclosing or failing to disclose material information.
Investor Claims Still Being Accepted
Although Tonghui Information itself is facing operational difficulties, Da Xin CPAs, as a leading domestic firm, possesses relatively strong solvency. In securities misrepresentation liability dispute cases, when auditing firms are found to have failed in their due diligence duties, they must bear joint and several compensatory liability. The legal team of Lawyer Liu Peng at Shanghai Huzi Law Firm has already added the institution as a co-defendant. Investors who bought shares between April 26, 2019, and March 31, 2024, and sold after April 1, 2024, or still hold them at a loss, are eligible to register for compensation claims. As regulatory accountability for intermediary institutions deepens, the case of Da Xin CPAs being fined nearly 10 million yuan serves as yet another warning: auditing institutions, as the "gatekeepers" of the capital market, must fulfill their duties with diligence, otherwise they will face severe legal consequences. For affected investors, the compensation claims window is now open, and those who qualify should take active steps to protect their legal rights through legal channels.
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