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After the market closed on August 15, Hesheng Silicon Industry (603260), a leading silicon-based new material company with a market value of over 50 billion yuan, disclosed the progress of the criminal case of its former general manager Fang Hongcheng.

According to the Criminal Judgment received by the company, Fang Hongcheng was convicted of the crime of accepting bribes by non-state personnel and was sentenced to 4 years and 6 months in prison and a fine of RMB 1 million by the Pinghu People's Court at first instance. Securities Times e-company reporters also learned that Fang Hongcheng's brother Fang Hongxing, as a co-defendant in the case, was convicted of the crime of accepting bribes by non-state personnel and was sentenced to 4 years and 2 months in prison and a fine of RMB 800,000.

Headquartered in Jiaxing, Zhejiang, Hesheng Silicon Industry is mainly engaged in the research and development, production and sales of silicon-based new materials such as industrial silicon and organic silicon. It is one of the companies with the most complete business chain and the largest production scale in my country's silicon-based new materials industry.

The silicon materials that Hosheng Silicon is engaged in are widely used in the photovoltaic field. During 2020-2021, driven by the development of the global photovoltaic industry, Hosheng Silicon's stock price soared, with the maximum increase exceeding 10 times and the highest market value exceeding 200 billion yuan. In the development history of Hosheng Silicon, former general manager and director Fang Hongcheng played an important role. Public information shows that in 2011, Fang Hongcheng became the general manager of Hosheng Limited, the predecessor of Hosheng Silicon, and served until 2018, during which time Hosheng Silicon experienced the share reform and listing.

It has been reported that Fang Hongcheng is the youngest and most professional industry leader in the domestic silicone industry, serving as the executive director and expert committee member of the China Fluorosilicon Materials Association. However, in December 2018, Hesheng Silicon Industry announced that Fang Hongcheng had applied to resign from the positions of director, general manager, and member of the strategic committee of the board of directors for personal reasons, and would no longer hold any position in the company after his resignation.

After resigning from Hesheng Silicon Industry, Fang Hongcheng set up his own business. According to Qichacha, Fang Hongcheng successively established Zhejiang Yingke New Materials Co., Ltd., Sichuan Futong New Materials Technology Co., Ltd., Shanxi Zhonglai New Materials Co., Ltd., etc. Among them, Zhejiang Yingke New Materials Co., Ltd. was established in 2019 with a registered capital of 90 million yuan; Sichuan Futong New Materials Technology Co., Ltd. was established in June 2021 with a registered capital of 100 million yuan.

In fact, in December 2018, when Hosun Silicon Industry conducted an audit of the departure of Fang Hongcheng, it was discovered that Fang Hongcheng had used his power to sell the company's products exclusively to his brother Fang Hongxing at abnormally low prices. It believed that the two of them were suspected of colluding to damage the interests of the company for personal gain, so it reported the case to the public security organs. On June 2, 2022, the Port District Branch of the Jiaxing Public Security Bureau filed a criminal case against Fang Hongcheng and Fang Hongxing for the crime of bribery and embezzlement of public office by non-state personnel. On September 21, 2022, Fang Hongcheng and Fang Hongxing were arrested according to law.

On May 31, 2023, the People's Procuratorate of Pinghu City prosecuted Fang Hongcheng and Fang Hongxing for the crime of accepting bribes by non-state personnel and the crime of embezzlement. After a public trial, the People's Court of Pinghu City made a guilty verdict on Fang Hongcheng and Fang Hongxing on August 15, 2024. The court ruled that Fang Hongcheng, together with Fang Hongxing, took advantage of their positions to extort money and property from others in the process of selling "hydrolyzed oil" and seek benefits for others in huge amounts. Their actions constituted the crime of accepting bribes by non-state personnel.

A person related to Hosun Silicon Industry told the reporter that the crimes committed by Fang Hongcheng and Fang Hongxing, which had caused the company to suffer for a long time, have finally been brought to justice. As a public company, Hosun Silicon Industry has always maintained a firm position of "zero tolerance" for corruption and other illegal and criminal acts. It will severely crack down on any form of bribery, solicitation of bribes, embezzlement, fraud, falsification, abuse of power for personal gain, disclosure of commercial secrets, etc., and firmly safeguard the legitimate rights and interests of itself and all shareholders from infringement.

Editor: Peng Bo

Proofreading: Yang Shuxin

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