Shang Hai Zheng Quan Bao·2025-11-29 13:21Core Viewpoint - ST Shenhua (000698) has been penalized by the Liaoning Regulatory Bureau of the CSRC for false reporting in annual reports from 2018 to 2021, leading to significant financial misstatements [2][6]. Summary by Relevant Sections Financial Misstatements - The company’s wholly-owned subsidiary, Shenyang Wax Chemical, manipulated financial data from 2018 to 2021 by adjusting production input quantities and delaying inventory recognition, resulting in inflated profits and understated costs [5][6]. - Cumulatively, the company inflated total profits by 290 million yuan over the four years [8]. Specific Annual Report Adjustments - In 2018, the company understated operating costs by 130 million yuan, inflated total profits by 130 million yuan (80.44% of reported profit), and understated inventory by 509 million yuan [7]. - In 2019, operating costs were understated by 204 million yuan, with total profits inflated by the same amount (29.4% of reported profit) [7]. - In 2020, operating costs were understated by 104 million yuan, with total profits inflated by 104 million yuan (19.14% of reported profit) [7]. - In 2021, operating costs were inflated by 148 million yuan, leading to a reduction in total profits by the same amount (70.11% of reported profit) [7]. Penalties and Consequences - The company received a warning and a fine of 7 million yuan, while four senior executives were penalized, with the highest being an 8-year market ban for the former general manager, Sun Zesheng [10][11]. - Other executives received fines ranging from 100,000 to 350,000 yuan and varying lengths of market bans [11]. Company Response - ST Shenhua has committed to learning from this incident, improving compliance with laws and regulations, and enhancing internal governance to protect shareholder interests [11].