Core Viewpoint - The company, Zhonghuan Co., Ltd., has identified violations in the use of raised funds amounting to 45 million yuan, attributed to operational errors by staff, and has since implemented corrective measures to improve internal controls [2][3][4]. Group 1: Violation Details - The company discovered two instances of improper use of raised funds totaling 45 million yuan, including 10 million yuan that was not redeemed by the board's approved due date and 35 million yuan used to purchase financial products without board approval [2][3]. - Both financial products were issued by Chengdu Bank, with expected annual returns ranging from 0.85% to 1.90%. The 10 million yuan product was purchased on December 29, 2025, and was due on January 29, 2026, while the 35 million yuan product was purchased on January 5, 2026, and was due on February 5, 2026 [3]. Group 2: Company Response and Remediation - The company held a board meeting on January 14, 2026, to ratify the use of idle raised funds for cash management and has communicated the situation to relevant personnel [5][6]. - The company has organized training for relevant departments on the legal regulations regarding cash management of raised funds to prevent similar issues in the future [5][6]. Group 3: Impact on Operations - The company has not faced regulatory penalties due to this incident, and it asserts that the situation will not affect its normal operations or the progress of its fundraising projects [4][6]. - The funds in question were part of the company's initial public offering, which raised approximately 119 million yuan in net proceeds, with specific allocations for projects in smart manufacturing and research center construction [6].