GOHIGH(SZ:000851) Sou Hu Cai Jing·2025-08-10 06:18Core Viewpoint - The regulatory crackdown on "empty" businesses has pushed China’s state-owned enterprise, Datang Gaohong Network Co., Ltd. (referred to as *ST Gaohong), to the brink of delisting due to a long-standing financial fraud scheme that lasted nine years, revealing a significant milestone in the "zero tolerance" regulatory history of China's capital market [1]. Group 1: Financial Fraud Details - *ST Gaohong engaged in fictitious trading operations, inflating revenue by 19.876 billion yuan and profits by 76.2259 million yuan over nine years [1][6]. - The fraudulent activities involved two main business models, including a complete "funds-contract-logistics" loop without actual goods flow, leading to inflated revenue in annual reports ranging from 694 million to 5.634 billion yuan [6]. - The company also committed fraud during its 2020 private placement, using fictitious revenue and profit data from 2018 to 2020 [6]. Group 2: Regulatory Actions - The China Securities Regulatory Commission (CSRC) proposed a fine of 160 million yuan against *ST Gaohong, marking one of the largest penalties in A-share history [8]. - Key executives, including Chairman Fu Jinglin and CFO Ding Mingfeng, faced significant fines and market bans, with Fu fined 7.5 million yuan and banned for ten years [9]. - The regulatory response indicates a trend towards comprehensive accountability, targeting both internal and external parties involved in the fraud [9][13]. Group 3: Company’s Financial State and Investor Impact - *ST Gaohong has faced continuous losses, with a cumulative loss exceeding 4.2 billion yuan from 2019 to 2024, and a projected loss of 1.3 to 1.8 billion yuan for the first half of 2025 [11][12]. - The company’s stock price has plummeted to 2.21 yuan, with a market capitalization of only 2.559 billion yuan, affecting approximately 52,000 investors who may incur significant losses [12]. - Legal challenges include over 900 million yuan in claims related to fraudulent trading practices, indicating a severe operational crisis [12]. Group 4: Governance Issues - The fall of *ST Gaohong is closely linked to its governance structure, which deteriorated after losing its state-owned enterprise status in 2022, leading to a lack of effective oversight [15]. - The company’s management, including key executives, failed to fulfill their responsibilities, contributing to the financial fraud [15][16]. - The role of external parties, such as Jiang Qing, who facilitated the fraudulent activities, highlights a concerning trend of collusion between internal and external actors in financial misconduct [14][16].