China News Service, March 22 (China News Business Reporter Xie Yiguan) The penalty hammer has finally been finalized!

　　SI Development plans to be fined RMB 8.5 million for allegedly failing to promptly disclose expected losses in operating results, failing to disclose important contracts in a timely manner, and containing false records in six consecutive annual reports, and the executives involved were also fined accordingly.

Suspected of inflating income by more than 4.7 billion yuan in 6 years

　　Recently, SI Development issued an announcement stating that it had received a "Prior Notice of Administrative Penalty and Market Ban" (hereinafter referred to as the "Notification") issued by the Shanghai Securities Regulatory Bureau. The "Notice" shows that the facts that SI Development is suspected of violating the law mainly include the following three aspects:

　　First, it is suspected of failing to promptly disclose expected losses in operating results. The "Notice" states that SI Development will learn no later than December 15, 2021 that it may be responsible for the accounts receivable of its holding subsidiary Shanghai SI Long Chuang Intelligent Technology Co., Ltd. (hereinafter referred to as "SI Long Chuang") There are risks such as irrecoverability and operating performance losses. However, it did not disclose the above matters in a temporary announcement until January 12, 2022.

　　The second is suspected of failing to promptly disclose the conclusion of important contracts. In September 2020, SI Development and Shanghai Gaoyang Hotel Co., Ltd., a wholly-owned subsidiary of SI Development, signed the "Framework Agreement for the Acquisition of State-owned Land Use Rights at No. 815 (Part) and No. 879 Dong Daming Road" with the Shanghai Hongkou District Land Development Center. . However, SI Development failed to disclose it in a timely manner as required.

  Screenshot from SI Development Announcement.

　　Third, the annual reports from 2016 to 2021 are suspected of containing false records. From 2016 to 2021, Cao Wenlong, the then chairman of Shanghai Industrial Longchuang, a subsidiary of SI Development Holdings, organized, instructed, and acquiesced to relevant personnel to pass fictitious contracts, inflate business implementation progress, implement idling self-circulation trade, and participate in military-civilian integration trade, etc. In this way, the revenue and profit amount of SI Longchuang from 2016 to 2021 were inflated, resulting in false records in SI Development's financial statements from 2016 to 2021. The total inflated revenue was 4.722 billion yuan and the total inflated profit was 614 million yuan.

　　At the same time, SI Longchuang’s financial fraud resulted in an understatement of goodwill impairment of RMB 220 million in SI Development’s 2017 annual report, accounting for 18.31% of SI Development’s total profits disclosed for the period; it resulted in an understatement of goodwill impairment in SI Development’s 2021 annual report. The bad debt provision was 809 million yuan, accounting for 52.36% of the total profit disclosed by SI Development in the current period.

SI Development plans to be fined 8.5 million yuan

　　The "Notice" shows that based on the facts, nature, circumstances and degree of social harm of the parties' illegal acts, the Shanghai Securities Regulatory Bureau plans to decide to give SI Development a warning and impose a fine of 8.5 million yuan.

　　In addition, Zeng Ming, the then legal representative and chairman of SI Development, was given a warning and fined 4 million yuan; Cao Wenlong was given a warning and fined 4 million yuan; SI Development's then vice president and financial director Yuan The disciplinary office issued a warning and a fine of RMB 3 million; the then president and director of SI Development, Xu Xiaobing, was given a warning and a fine of RMB 2.1 million; the then president and director of SI Development, Tang Jun, was given a warning and a fine of RMB 2.1 million. fine; Wang Liangjun, then vice president and director of SI Development, was given a warning and fined 1 million yuan; Guo Weimin, then vice president of SI Development and director of SI Longchuang, was given a warning and fined 750,000 yuan.

  Screenshot from SI Development Announcement.

　　Due to the seriousness of Cao Wenlong's illegal behavior, the Shanghai Securities Regulatory Bureau plans to decide to ban Cao Wenlong from the securities market for 10 years.

　　The reporter noticed that after the release of the "Notice", the stock price of SI Development has fluctuated recently. After the stock price fell on March 19 and 20, SI Development's stock price weakened again on the 22nd. As of press time, the stock price fell by more than 2%.

Financial fraud becomes the focus of supervision

　　In recent years, financial fraud has been the focus of regulatory enforcement. SI Development encountered heavy penalties this time, which can be described as "hitting the muzzle of the gun."

　　The reporter noticed that the recently issued "Opinions on Strengthening the Supervision of Listed Companies (Trial)" mentioned that information disclosure supervision should be strengthened and performance fraud should be severely punished. It will start from five aspects: building a comprehensive punishment and prevention system for financial fraud, improving the ability and level of penetrating supervision, seriously rectifying areas where fraud is common, consolidating the responsibilities of listed companies and intermediaries, and strengthening all-round and three-dimensional accountability.

　　"Severely crack down on long-term systemic fraud and third-party coordinated fraud, and resolutely eliminate the fraud 'ecosystem'" "increase the crackdown on financial 'bathing'" and "formulate a comprehensive punishment and prevention work plan for financial fraud in the capital market" and a series of specific requirements , in the opinion of industry insiders, it is conducive to punishing deception and counterfeiting in the market environment and protecting investors. (over)