Zhong Guo Jing Ying Bao·2025-09-20 01:22Core Viewpoint - ST Tian Sheng has been penalized for financial fraud involving off-balance sheet funds, resulting in a total fine of 4.39 million yuan for the company and 22 responsible individuals [3][4]. Financial Fraud Details - The financial fraud methods employed by ST Tian Sheng primarily revolved around an "off-balance sheet fund pool," where the company inflated project costs and procurement expenses to siphon funds into a hidden pool [4]. - In the annual reports for 2017 and 2018, ST Tian Sheng inflated total profits by 175 million yuan and 47.9 million yuan, respectively, while also reducing profits by 82.58 million yuan and 19.09 million yuan through inflated procurement costs [4]. - The total inflated profits for 2017 and 2018 amounted to 92.20 million yuan and 28.82 million yuan, representing 30.21% and 20.61% of the reported profits for those years [4]. Undisclosed Related Transactions - The undisclosed related transactions for 2017 and 2018 reached 481 million yuan and 48.63 million yuan, accounting for 15.08% and 1.49% of the net assets at the end of those periods [5]. - Notably, after the company's listing, the undisclosed related transactions amounted to 329 million yuan, exceeding 15% of the most recent audited net assets [5]. Regulatory Actions - The Chongqing Securities Regulatory Bureau imposed penalties on ST Tian Sheng for failing to disclose related transactions and for false reporting in the 2017 and 2018 annual reports, including a warning and a fine of 600,000 yuan [6]. - Key individuals, including Liu Qun, received significant fines and market bans, with Liu Qun facing a total fine of 900,000 yuan and a lifetime ban from the securities market [6]. Legal Consequences for Executives - Liu Qun, the actual controller of ST Tian Sheng, was sentenced to 19 years in prison for multiple crimes, including bribery and embezzlement, along with fines totaling 2 million yuan and the confiscation of personal assets worth 8 million yuan [7]. Internal Governance Issues - The financial fraud case highlights severe deficiencies in the company's internal governance, leading to a risk warning status since April 2019, with the stock name changed to "ST Tian Sheng" [8]. - The company's recent performance has been poor, with a reported revenue of 232 million yuan in the first half of 2025, a year-on-year decline of 17.49%, and a net loss of 36.71 million yuan [8].