**I. Disclosure of Illegal Activities**
Huawen Media Group has paid a heavy price for financial fraud, with cumulative falsely inflated revenue exceeding 422 million yuan. The investor compensation lawsuit is currently under court review.
On April 22, 2025, the company received an Administrative Penalty Decision issued by the Hainan Securities Regulatory Bureau, with the main violation being false records in related financial reports.
The story of Huawen Media Group is far from over. On May 6, 2025, the company signed a Restructuring Investment Agreement with two industrial investors, who will collectively pay 610 million yuan in restructuring investment funds. This development may inject new vitality into the company and will directly impact the final outcome of investor compensation claims.
**II. Investor Compensation Requirements**
Looking back at this case, as determined by the Hainan Securities Regulatory Bureau, the company used the gross method to recognize revenue from internet advertising top-up services conducted by subsidiaries, resulting in falsely inflated operating revenue and operating costs, which led to false records in the company's disclosed 2021 annual report, 2022 interim report, and 2022 annual report. Overall, during 2021-2022, through the misuse of gross method accounting for internet advertising top-up services, the company cumulatively inflated revenue by 422 million yuan. It was not until April 30, 2024, that an announcement was issued to correct the related accounting error matters.
Regarding investor compensation requirements, investors who purchased shares before April 27, 2022 to April 19, 2024 (inclusive), and sold after April 20, 2024 or still hold shares with losses, are eligible to participate. It's worth noting that in such cases, listed companies only provide compensation when investors actively file lawsuits. Eligible affected investors need to actively participate in rights protection to obtain compensation.
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