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dinglong culture, which has been delisted from the a-share market, received a fine.

an administrative penalty decision document disclosed by the guangdong securities regulatory bureau on september 11 showed that due to the inflated inventory, operating income and profits, the disclosed 2021 annual report and 2022 semi-annual report contained false records. the guangdong securities regulatory bureau issued a warning to dinglong culture and related parties and imposed a fine.

it is worth noting that dinglong culture is a company that has been delisted from the a-share market and was delisted from the shenzhen stock exchange on september 5.

guangdong securities regulatory bureau issues fine to dinglong shares

the administrative penalty decision disclosed by the guangdong securities regulatory bureau on september 11 shows that xundian jinlin is a subsidiary of zhongti technology, a subsidiary of dinglong culture holdings. in 2021, xundian jinlin falsely increased the output of titanium concentrate by approximately 23,000 tons, and sold the aforementioned falsely increased titanium concentrate to fumin longteng titanium co., ltd. (hereinafter referred to as "longteng titanium") and yunnan copper (group) titanium co., ltd. (hereinafter referred to as "yunnan copper titanium") through yunnan jiumai trading co., ltd. and kaiyuan desheng trading co., ltd. the titanium concentrate subject to the above transaction was not actually produced, the goods were not actually delivered, the sales contract was not actually executed, and the relevant economic benefits did not flow into the enterprise, which did not meet the requirements for revenue recognition in "enterprise accounting standard no. 14 - revenue".

the administrative penalty decision believes that dinglong culture included the above-mentioned inflated inventory, operating income and profits in the scope of consolidated financial statements, resulting in false records in its disclosed 2021 annual report and 2022 semi-annual report. among them, the inflated inventory in 2021 was about 9.5808 million yuan, and the inflated total profit was about 2.1472 million yuan, accounting for 16.30% of the total profit disclosed in the current period; the inflated operating income in the first half of 2022 was 45.7787 million yuan, and the inflated total profit was 37.9035 million yuan, accounting for 19.72% and 64.10% of the absolute value of the disclosed operating income and total profit in the current period, respectively.

in april 2023, dinglong culture issued the "announcement on correction of prior period accounting errors", making corrections and adjustments to the 2021 annual report and the 2022 semi-annual report.

the administrative penalty decision letter believes that the 2021 annual report and 2022 semi-annual report announced by dinglong culture contain false statements, which violate the provisions of article 78, paragraph 2, and article 79 of the securities law, and constitute the illegal acts described in article 197, paragraph 2 of the securities law.

the administrative penalty decision pointed out that during the period involved in the case, the relevant directors, supervisors, and senior management of dinglong culture violated 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 2 of the securities law.

among them, long mouqin, as the then chairman and general manager of dinglong culture, presided over the overall work of dinglong culture and was responsible for the company's daily operation and management. he also served as the then director of zhongti technology, as well as the then director of longteng titanium industry and the then director of yuntong titanium industry. he failed to perform his duties diligently and was the supervisor directly responsible for the above-mentioned illegal information disclosure of dinglong culture.

as the then director of dinglong culture and chairman of zhongti technology, fang moupo was fully responsible for the operation and management of zhongti technology. he also served as the then chairman of longteng titanium and yuntong titanium. he failed to perform his duties diligently and was the executive directly responsible for the above-mentioned illegal information disclosure by dinglong culture.

wang mouping, as the then-board secretary, deputy general manager and acting financial director of dinglong culture, was in charge of information disclosure and performed overall financial management work during part of the period involved in the case. he was also the then-director of zhongti technology and the then-director of yuntong titanium industry. he failed to perform his duties diligently and is the other directly responsible person for the above-mentioned information disclosure violations by dinglong culture.

zhang moulong, as the then-cfo of zhongti technology and the then-investment director and head of the accounting agency of dinglong culture, was in charge of the accounting work of zhongti technology and participated in the review of the titanium concentrate sales business documents involved in the case. he is the other directly responsible person for the above-mentioned information disclosure violations by dinglong culture.

as the then general manager of xundian jinlin, liu was responsible for the daily production management of xundian jinlin, presided over the production of xundian jinlin's titanium concentrate, signed xundian jinlin's production reports and other production-related documents, and participated in the review of the titanium concentrate sales business documents involved in the case. he is another directly responsible person for the above-mentioned information disclosure violations by dinglong culture.

taking into account the duration of the illegal acts in this case, the parties' active cooperation in the investigation and provision of materials, and the company's retroactive adjustment of relevant financial data, and based on the facts, nature, circumstances and degree of social harm of the parties' illegal acts, and in accordance with the provisions of article 197, paragraph 2 of the securities law, the guangdong securities regulatory bureau has decided:

1. give a warning to dinglong culture co., ltd. and impose a fine of rmb 5 million;

2. give warnings to long mouqin and fang moupo and impose fines of rmb 1.5 million each;

3. give wang mouping a warning and impose a fine of rmb 800,000;

4. zhang moulong and liu mou were given a warning and fined rmb 600,000 respectively.

on the evening of september 11, dinglong culture also issued an announcement to confirm the above-mentioned penalty. regarding the impact of the penalty on the company, dinglong culture stated that as of the date of disclosure of this announcement, the company's production and operation were normal. the penalty did not have a significant adverse impact on the company's production and operation. given that the company was fined 5 million yuan, the penalty will have a certain negative impact on the financial aspect.

in terms of response measures and rectification, the company stated that in response to the issues of inflated inventory and operating income involved in the "administrative penalty decision", the company disclosed the "announcement on correction of prior period accounting errors" and the corrected relevant periodic reports on the juchao information network on april 29, 2023, and made corrections and adjustments to the financial report data for the relevant period.

dinglong culture stated that the company deeply apologizes for the negative impact brought to the company by the matters involved in this administrative penalty, and will take it as a warning, requiring relevant personnel of the company and its subsidiaries to seriously learn from experience and lessons, strengthen the study of relevant laws and regulations, information disclosure rules and corporate accounting standards, further strengthen the standardization and effectiveness of internal governance, strengthen the management of key business links, improve the level of financial accounting, and effectively improve the company's overall standardized operation level and information disclosure quality, safeguard the interests of the company and all shareholders, and promote the company's healthy, stable and sustainable development.

the company was delisted from the a-share market not long ago.

it is worth noting that dinglong culture is a company that has been delisted from the a-share market.

in august this year, dinglong culture issued an announcement on receiving the decision to terminate the listing of its shares. the announcement showed that the company's stock closing price through the shenzhen stock exchange trading system was less than 1 yuan for 20 consecutive trading days from june 19, 2024 to july 16, 2024, which triggered the termination of the listing of stocks stipulated in article 9.2.1, paragraph 1, item 4 of the shenzhen stock exchange's "stock listing rules (revised in 2024)". the shenzhen stock exchange decided to terminate the listing of the company's shares.

on the evening of september 4, dinglong culture issued an announcement on the termination and delisting of the company's shares, showing that the company's shares will be delisted from the shenzhen stock exchange on september 5, 2024.