Yong Yue Science & Technology's Actual Controller Repeatedly Violates Regulations: From Million-Yuan Fines to Release on Bail

**I. Actual Controller Released on Bail Pending Trial**

On September 15, Yong Yue Science & Technology shares fell by over 6% at one point, following news that its actual controller was released on bail pending trial.

On September 14, Yong Yue Science & Technology announced that the company's actual controller, Chen Xiang, was released on bail pending trial by Quanzhou Public Security Bureau on September 12, in connection with suspected violations of disclosure regulations and failure to disclose material information.

This is not Chen Xiang's first encounter with regulatory challenges. In April 2024, he was subject to investigation by the China Securities Regulatory Commission (CSRC) for suspected violations of information disclosure regulations. Just days later, he faced another investigation for suspected insider trading in the securities market.

The situation for Yong Yue Science & Technology is also concerning. Some cases represented by lawyer Liu Peng from Shanghai Huzhi Law Firm involving investors suing Yong Yue Science & Technology for securities misrepresentation have received loss calculation results, and subsequent proceedings will continue according to established procedures. Looking back at this case, on August 15, 2024, the company disclosed that it had received an administrative penalty decision for information disclosure violations.

**II. Two Categories of Investors Eligible for Rights Protection**

Upon investigation, the identified violations include: first, misleading statements in interim announcements regarding major contracts; and second, failure to timely disclose non-operating capital occupation by related parties and significant omissions in periodic reports. As of April 15, 2024, related parties have returned all occupied funds plus interest.

The CSRC will continue to work with relevant parties to strengthen comprehensive and multi-dimensional accountability for securities violations and crimes, supporting more investors in utilizing legal remedies including civil litigation to pursue civil damage compensation from violators.

According to relevant regulations, investors meeting any of the following criteria may participate in rights protection:

(1) Purchased shares between August 28, 2023, and September 17, 2023, and sold on or after September 18, 2023, or still hold shares with losses;

(2) Purchased shares between March 20, 2022, and October 11, 2023, and sold after October 12, 2023, or still hold shares with losses.