37 Interactive Entertainment Fined 32.55 Million Yuan for Seven Years of Disclosure Violations

Deep News12-05

37 Interactive Entertainment Network Technology Group Co., Ltd. (002555) announced on December 5 that it received a penalty decision from the China Securities Regulatory Commission (CSRC) for false disclosures and failure to report related-party transactions over seven years. The company and six executives were collectively fined 32.55 million yuan.

**Key Violations** 1. **False Shareholding Disclosures (2014–2020):** The company’s annual reports from 2014 to 2020 inaccurately reflected shareholder holdings. Specifically, 22.718 million shares issued during a 2014 restructuring were secretly held by Chairman Li Weiwei and Vice Chairman Zeng Kaitian under others’ names.

2. **Unreported Related-Party Transactions:** - **2018:** Failed to disclose the acquisition of a 20% stake in Jiangsu Aurora, a transaction involving an associate of the company. - **2020:** Misrepresented the indirect acquisition of Guangzhou 37’s equity in a temporary announcement and omitted it from the annual report. - **2018–2021:** Did not report 1.15 billion yuan, 1.08 billion yuan, 7.60 billion yuan, and 193 million yuan in transactions with Hainan Liyuan and other entities controlled by Li and Zeng.

**Penalties** - **Company:** 9 million yuan fine. - **Li Weiwei (Chairman):** 14 million yuan (5 million as responsible executive + 9 million as controlling shareholder). - **Other Executives:** Fines ranging from 25,000 yuan to 3.5 million yuan for Yang Jun (VP), Zeng Kaitian, Ye Wei (Board Secretary), Hu Yuhang, and Wu Weihong (Vice Chairs).

**Additional Actions** Anhui CSRC issued warnings to 13 former directors, supervisors, and executives, including Zhang Yun and Chen Xialin, recording the violations in their market integrity files.

**Company Snapshot** 37 Interactive Entertainment, known for hit games like *Douluo Continent: Soul Master Duel* and *Glory of the Archangel*, reported Q1–Q3 2025 revenue of 12.461 billion yuan (down 6.59% YoY) but net profit rose 23.57% to 2.345 billion yuan.

As of December 5, its shares closed at 20.04 yuan, down over 10% from November’s peak, with a market cap of 44.3 billion yuan.

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