DFSS(SH:603377) Zhong Guo Ji Jin Bao·2025-07-12 08:28Core Viewpoint - The actual controller of ST Dongshi, Xu Xiong, has been sentenced to 6 years and 6 months in prison for manipulating the securities market, along with a fine of 170 million RMB, marking a significant legal consequence for the company and its management [2][3]. Group 1: Legal Proceedings and Company Management - Xu Xiong was arrested on September 15, 2023, for suspected market manipulation, which was linked to allegations made by former private equity manager Ye Fei regarding "market value management" involving multiple listed companies [3]. - The court's judgment is a first-instance ruling and has not yet taken effect, leaving room for potential appeals and uncertainties regarding the final outcome [3]. - Following Xu's arrest, internal conflicts within the management of ST Dongshi have escalated, leading to continuous financial losses for the company [7]. Group 2: Financial Performance - From 2022 to 2024, ST Dongshi reported a total net loss of 1.324 billion RMB, with continuous losses recorded in its financial statements [7]. - The company's total revenue has seen a decline, with a reported revenue of 1.380 billion RMB for the first quarter of 2025, reflecting a year-on-year decrease of 26.31% [8]. - The company has faced significant operational challenges, including a failure to recover misappropriated funds amounting to approximately 387 million RMB, which has led to regulatory scrutiny and potential stock suspension [9][10]. Group 3: Regulatory Actions - The Beijing Securities Regulatory Bureau has mandated that the company complete the recovery of misappropriated funds within six months, failing which the company may face stock suspension [10]. - As of July 10, 2025, the company has initiated a pre-restructuring process, appointing a liquidation team to manage its affairs during this period [10].