Zhejiang Tony Electronic Co., Ltd. (ST东尼, 603595.SH) has been penalized for financial fraud, including failing to disclose major contract breaches and inflating profits by over 100 million yuan within 18 months.
On November 12, the company announced receiving a penalty notice from the Zhejiang Securities Regulatory Bureau, imposing a total fine of 15.7 million yuan, including 7 million yuan on the company and the rest on six responsible individuals. Tony Electronic stated it would actively rectify the issues and apologized to investors.
When contacted, a company representative declined to comment but confirmed operations remain normal. The company accepted the penalty without appeal.
**Fraud Details Exposed** Tony Electronic, specializing in ultra-fine alloy wires and composite materials for industries like consumer electronics and solar energy, went public in July 2017.
The investigation revealed two violations: 1. **Delayed Disclosure**: A subsidiary, Huzhou Tony Semiconductor, signed a 675-million-yuan contract in January 2023 to deliver 135,000 silicon carbide substrates but met only 6.74% of the target by October. The failure was disclosed three months later. 2. **Profit Inflation**: The 2022 annual and 2023 semi-annual reports falsely inflated profits by 38.7 million yuan and 72.3 million yuan, respectively, totaling over 110 million yuan. Tactics included misclassifying R&D expenses as inventory and underreporting costs.
Experts emphasized that such fraud undermines market integrity and investor trust, distorting capital allocation.
**Penalties and Market Impact** The Zhejiang regulator fined Tony Electronic 7 million yuan and its former chairman 3.5 million yuan, among other penalties totaling 15.7 million yuan. The company accepted the penalties without dispute.
Tony Electronic’s financial performance has struggled, with a 600-million-yuan net loss in 2023 and a marginal profit in 2024. Its stock, renamed *ST Tony* after the penalty notice, plunged for four consecutive days.
As of Q3 2025, the company had 34,500 shareholders. Its shares rose 2% to 18.69 yuan on November 13 but remain 78% below their January 2023 peak.
The company reiterated its commitment to rectifying the issues and safeguarding investor interests.
