ST Jihua has been fined RMB 7 million by the China Securities Regulatory Commission for illegal information disclosure. An investigation found that a wholly-owned subsidiary recognized land sale revenue across periods, leading to a reduction in total profit of RMB 502 million in the 2020 annual report, accounting for 60.26 percent of the disclosed total profit for that period. In addition, the company inflated operating revenue through financing trade and agency business, inflating revenue by RMB 5.098 billion and RMB 2.998 billion in 2018 and 2019 respectively, representing 22.48 percent and 14.17 percent of the disclosed operating revenue for those periods. In 2020 and 2021, revenue was inflated by RMB 551 million and RMB 1.013 billion respectively, accounting for 3.68 percent and 6.54 percent of the disclosed operating revenue for those periods. The company has been ordered to rectify the issues and given a warning. Responsible individuals including former chairmen Li Yiling and Yuan Haili have also been fined varying amounts. ST Jihua stated it will correct errors and make retrospective adjustments to its financial reports, and pledged to improve the quality of information disclosure.
Jihua Group Corp LtdFined RMB 7 million for disclosure violations including inflated revenue and improper land sale recognition.