On February 27, 2026, Haitai Development received a Case Filing Notice from the China Securities Regulatory Commission, followed by an Administrative Penalty Decision on April 25, 2026. Regulatory investigations revealed that the company had engaged in illegal practices concerning information disclosure.
The investigation showed that between 2021 and 2022, Haitai Development participated in businesses related to cotton trading. However, due to the company's failure to adequately assess the actual transaction nature of such operations, certain business activities, despite forming a surface-level process involving contracts, invoices, and fund flows, did not involve the genuine transfer of commodity-related risks and rewards. According to regulatory determinations, these operations did not meet the conditions for revenue recognition, and the company should not have recognized corresponding operating revenue, operating costs, and related profits.
As a result of improper accounting treatment, the annual reports for 2021 and 2022 disclosed by Haitai Development contained false records. Specifically, in the 2021 annual report, the company inflated operating revenue by RMB 252,088,300, accounting for 27.66% of the disclosed revenue for that period; inflated operating costs by RMB 249,416,500, representing 31.22% of the disclosed costs; and inflated total profit by RMB 2,671,800, constituting 17.77% of the disclosed total profit. In the 2022 annual report, the company inflated operating revenue by RMB 226,371,200, representing 45.88% of the disclosed revenue; inflated operating costs by RMB 224,385,200, accounting for 57.59% of the disclosed costs; and inflated total profit by RMB 1,986,000, making up 12.10% of the disclosed total profit.
The penalty primarily addresses the company's revenue recognition issues related to its cotton trading business. Regulatory authorities determined that the disclosed information failed to truthfully reflect the company's operational status, thereby compromising the accuracy of the annual report information.
Investors who meet the following criteria are now eligible to participate in claims for compensation: those who purchased shares between April 30, 2022, and February 27, 2026 (inclusive), and who either sold their shares after February 28, 2026, or continue to hold them at a loss.
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