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China Fund News reporter heard

On the evening of August 1, two A-share listed companies announced that there had been important progress in the matters that had previously been investigated.

First, the "Administrative Penalty Decision" issued by the Zhejiang Securities Regulatory Bureau received by ST Xia Chuang showed that its 2018 annual report and 2019 semi-annual report contained false records.

Secondly, the "Preliminary Notice of Administrative Penalty" issued by the Guangdong Securities Regulatory Bureau received by Jiayun Technology showed that its subsidiary Shenzhen Jiajie Culture Media Co., Ltd. (hereinafter referred to as Jiajie Culture) suffered a major loss in 2021, but it delayed the disclosure of information.

False records in periodic reports

Looking back, ST Xia Chuang received the "Notice of Case Filing" issued by the China Securities Regulatory Commission on November 21, 2023, and the "Administrative Penalty Decision" issued by the Zhejiang Securities Regulatory Bureau on August 1, 2024 for suspected violations of information disclosure laws and regulations.

In May 2018, ST Xiachuang held a total of 50% of the voting rights of Haoyiyou Medical Technology Co., Ltd. (hereinafter referred to as Haoyiyou), and occupied two of the three seats on the board of directors stipulated in the articles of association of Haoyiyou. Thus, ST Xiachuang obtained the actual control of Haoyiyou and included the latter in the scope of consolidated financial statements.

The "Administrative Penalty Decision" shows that from 2018 to 2019, in order to expand its operating income, Haoyiyou inflated its operating income by fabricating or inflating consultation and advisory services, and arranged third-party entities such as Xiamen Cultural Media Co., Ltd. and Xiamen Information Technology Co., Ltd. to cooperate in idle funds.

The specific forms in which Haoyiyou fabricated or inflated consultation reports include: first, increasing the number of consultation and consulting services for patients; second, raising the level of consultation and consulting services for patients; and third, recognizing income from consultation and consulting services given to patients at normal charges.

The Zhejiang Securities Regulatory Bureau pointed out that the above-mentioned behavior of Haoyiyou caused ST Xiachuang's 2018 annual report to falsely increase its operating income by 75.3369 million yuan, accounting for 12.49% of the amount disclosed in the current period; the 2019 semi-annual report falsely increased its operating income by 47.1227 million yuan, accounting for 17.17% of the amount disclosed in the current period.

In response, ST Xiachuang retroactively restated its 2018 annual financial report on April 30, 2020, and disclosed the revised data of its 2019 semi-annual financial report on May 20, 2020.

The Zhejiang Securities Regulatory Bureau believes that the above-mentioned actions of ST Xia Chuang constitute illegal and irregular information disclosure as described in the first paragraph of Article 193 of the Securities Law of 2005, and decided to order ST Xia Chuang to correct its mistakes, give it a warning, and impose a fine of 600,000 yuan.

Delayed disclosure of significant losses

In retrospect, Jiayun Technology received the "Notice of Case Filing" issued by the China Securities Regulatory Commission on May 17, 2024, and the "Preliminary Notice of Administrative Penalty" issued by the Guangdong Securities Regulatory Bureau on July 31, 2024 for suspected violations of information disclosure laws and regulations.

The "Preliminary Notice of Administrative Penalty" shows that Jiajie Culture organized the C-LOUD Music Carnival project in 2021, which resulted in significant losses.

On December 14, 2021, Jiayun Technology confirmed that Jiajie Culture incurred a loss of 68.248 million yuan in October 2021, and the cumulative loss reached 70.6324 million yuan by the end of October 2021, accounting for 19.56% of the absolute value of Jiayun Technology's audited net profit in 2020 (-361 million yuan).

The "Preliminary Notice of Administrative Penalty" pointed out that according to the relevant provisions of the "Securities Law of the People's Republic of China" (hereinafter referred to as the "Securities Law") and the "Information Disclosure Management Measures for Listed Companies" (CSRC Order No. 182), Jiayun Technology should disclose the above-mentioned major losses in a timely manner.

However, Jiayun Technology did not disclose this until April 28, 2022, in its 2021 annual report.

The Guangdong Securities Regulatory Bureau believes that the above-mentioned actions of Jiayun Technology are suspected of violating the provisions of Article 78, paragraph 1, Article 80, paragraph 1, and paragraph 2, item 5 of the "Securities Law", and constitute the illegal circumstances described in Article 197, paragraph 1 of the "Securities Law".

During the period in which the case involved Jiayun Technology, relevant directors and senior management personnel were suspected of violating the provisions of Article 82, paragraph 3, of the Securities Law, and constituted the "directly responsible supervisors and other directly responsible persons" as stated in Article 197, paragraph 1, of the Securities Law.

In accordance with the provisions of Article 197, paragraph 1 of the Securities Law, the Guangdong Securities Regulatory Bureau intends to decide to give a warning to Jiayun Technology and its relevant directors and senior management, and impose corresponding fines on them respectively.

Editor: Captain

Review: Chen Mo

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