Zhong Guo Ji Jin Bao·2025-12-26 15:29Core Viewpoint - The China Securities Regulatory Commission (CSRC) has taken serious action against Changjiang Pharmaceutical Holdings Co., Ltd. (*ST Changyao) for significant financial fraud, leading to the initiation of delisting procedures by the Shenzhen Stock Exchange [2][5]. Group 1: Regulatory Actions - The CSRC has issued an administrative penalty notice to *ST Changyao for false reporting of financial data over three consecutive years, resulting in a proposed fine of 10 million yuan for the company and a total of 31 million yuan for 14 responsible individuals [5][7]. - The former general manager, Luo Ming, faces a lifetime ban from the securities market due to his role in the fraud [5][7]. - The CSRC is also investigating the practices of intermediary institutions involved, with potential criminal referrals based on findings [5][6]. Group 2: Financial Misconduct Details - *ST Changyao inflated its revenue and profits from 2021 to 2023, with reported inflated revenues of 215.32 million yuan, 283.74 million yuan, and 233.63 million yuan, representing 9.12%, 17.57%, and 19.51% of the disclosed revenues for those years respectively [6]. - The company also reported inflated profit totals of 56.40 million yuan, 63.38 million yuan, and 43.71 million yuan, which accounted for 35.62%, 88.23%, and 6.42% of the disclosed profit totals for the respective years [6][7]. - In 2022, *ST Changyao's failure to properly recognize losses related to a project led to an additional profit inflation of 4.55 million yuan, which was 6.34% of the disclosed profit total for that year [7]. Group 3: Company Performance and Market Impact - *ST Changyao has been experiencing continuous losses, with a net profit of -210 million yuan for the first three quarters of 2025, a year-on-year decrease of 15.89% [10]. - The company's stock price has been declining since the investigation began, closing at 1.47 yuan per share on December 26, with a total market value of only 515 million yuan [12]. - As of September 2023, *ST Changyao had only 14,233 A-share shareholders, with an average holding value of 95,300 yuan [12].