Core Viewpoint - Guangdong Zijing Information Storage Technology Co., Ltd. has been forced to delist due to major violations, with significant legal consequences for its executives [1][11]. Legal Proceedings - The company was fined 37 million RMB for fraudulently issuing securities [4][13]. - The actual controller Zheng Mu received a combined sentence of 7 years and 6 months, along with a fine of 500,000 RMB for multiple offenses [4][13]. - Other executives, including Luo Tiewei and Li Yanxia, received prison sentences ranging from 2 years to 7 years and fines varying from 350,000 to 500,000 RMB [5][14][15]. Company Background - Zijing Storage was established on April 15, 2010, and primarily engaged in the research, manufacturing, and sales of storage devices [8][16]. - The company was listed on the National Equities Exchange and Quotations (NEEQ) in 2016 and later on the Shanghai Stock Exchange's Sci-Tech Innovation Board in 2020, raising a total of 1.023 billion RMB [9][17]. Financial Misconduct - From 2017 to 2019, the company inflated profits significantly, with 2017's inflated profits accounting for 34.83% of total profits, and 2019's inflated revenue reaching 42.97% of total revenue [9][17]. - The company failed to disclose external guarantees totaling 125 million RMB, leading to severe financial discrepancies [9][17]. Investor Compensation - Following the delisting, a compensation mechanism was established, with four intermediary institutions committing to pay a total of 1.275 billion RMB for investor compensation [10][18]. - By June 30, 2023, 97.22% of affected investors had reached settlements, receiving a total of 1.086 billion RMB in compensation [10][18].

Core Viewpoint - Guangdong Zijing Information Storage Technology Co., Ltd. (referred to as "Zijing Storage") has been sentenced for securities fraud, leading to significant penalties for its management and the cessation of its operations [1][5]. Group 1: Legal Proceedings and Penalties - Zijing Storage was found guilty of securities fraud, resulting in a fine of 37 million yuan and prison sentences for its core management, including the actual controllers Zheng Mu and Luo Tiewei [1][5]. - Zheng Mu received a prison sentence of seven years and six months, along with a fine of 500,000 yuan, while Luo Tiewei was sentenced to seven years and fined 400,000 yuan [1][5]. - The company has ceased operations following the court's ruling [1][5]. Group 2: Financial Misconduct - From 2017, Zijing Storage engaged in fraudulent activities to inflate revenue and profits, including signing false contracts and falsifying logistics documents [2][5]. - Specific instances of profit inflation include 34.83% in 2017, 32.25% in 2018, and 42.97% in the first half of 2019, with profit inflation reaching 137.31% during the same period [2][5]. - The company failed to disclose external guarantees totaling 125.0012 million yuan [2][5]. Group 3: Impact on Investors - The China Securities Regulatory Commission (CSRC) issued an administrative penalty to Zijing Storage in April 2023, followed by a decision to delist its stock in May 2023 due to major violations of listing rules [2][6]. - A total of 17,471 investors suffered losses amounting to over 1.097 billion yuan, with 16,986 investors receiving 1.086 billion yuan in compensation, representing 97.22% of affected investors and 98.93% of the total compensation amount [2][6]. Group 4: Company Background and Performance - Zijing Storage was established in April 2010, focusing on the research, manufacturing, and sales of storage devices [3][6]. - The company was listed on the National Equities Exchange and Quotations (NEEQ) in April 2016 and later on the Shanghai Stock Exchange's Sci-Tech Innovation Board in February 2020, raising over 1 billion yuan [3][7]. - Initial performance was strong, with a 264.08% increase on the first day of trading, but revenue declined significantly thereafter, with a reported revenue of 563 million yuan in 2020 and a net profit loss of 229 million yuan in 2021 [3][7].

Core Viewpoint - Guangdong Zijing Information Storage Technology Co., Ltd. has been forced to delist due to serious violations, with significant legal consequences for its executives and financial penalties imposed on the company [1][9]. Legal Proceedings - The company was fined 37 million RMB for the crime of fraudulent issuance of securities [3]. - The actual controller Zheng Mu received a combined sentence of seven years and six months, along with a fine of 500,000 RMB for multiple offenses [3]. - Other executives, including Luo Tiewei and Li Yanxia, received prison sentences ranging from two years to seven years, with varying fines [4][5]. Financial Misconduct - The company engaged in financial fraud to inflate revenue and profits through false contracts and forged documents, significantly misrepresenting its financial health [7]. - In its prospectus for the initial public offering, the company reported false revenue and profits, concealing external guarantees totaling 125 million RMB [7]. Stock Market Activity - Zijing Storage was listed on the Shanghai Stock Exchange's Sci-Tech Innovation Board in 2020, raising approximately 1.023 billion RMB, but later faced severe financial downturns [8]. - The company reported a revenue decline of 6.69% in 2021, with a net loss of 229 million RMB, leading to an audit report that could not express an opinion [8]. Investor Compensation - Following the delisting, a compensation mechanism was initiated, with four intermediary institutions committing a total of 1.275 billion RMB for investor compensation [9]. - By June 30, 2023, 97.22% of affected investors had reached settlements, receiving a total of 1.086 billion RMB in compensation [10].

Core Viewpoint - Guangdong Zijing Information Storage Technology Co., Ltd. has been forced to delist due to serious violations, with significant legal consequences for its executives and financial penalties imposed on the company [2][12]. Legal Consequences - The company was fined 37 million RMB for the crime of fraudulent issuance of securities [5]. - The actual controller Zheng Mu received a combined sentence of seven years and six months, along with a fine of 500,000 RMB for multiple offenses [6]. - Other executives, including Luo Tiewei and Li Yansha, received sentences ranging from one year and nine months to eight years, with varying fines [6][7][8][9][10]. Financial Misconduct - The company engaged in financial fraud by inflating revenue and profits through false contracts and documents, which misled regulatory authorities during its IPO process [11]. - The inflated profits accounted for 34.83% of total profits in 2017 and 32.25% in 2018, with significant revenue inflation in 2019 [11]. Company Performance and Delisting - After its IPO in 2020, the company's performance declined sharply, reporting a revenue drop of 6.69% in 2021 and a net loss of 229 million RMB [12]. - The company was investigated for information disclosure violations starting in February 2022, leading to its forced delisting in July 2023 [12][13]. Investor Protection Measures - The case initiated a precedent for compensation for investors in the Sci-Tech Innovation Board, with intermediary institutions committing 1.275 billion RMB for investor compensation [14]. - By June 30, 2023, 97.22% of affected investors had reached settlements, receiving a total of 1.086 billion RMB in compensation [14].

Core Viewpoint - Guangdong Zijing Information Storage Technology Co., Ltd. has been forced to delist due to major violations, with significant legal consequences for its executives [1][11]. Legal Consequences - The company was fined 37 million RMB for fraudulently issuing securities [4][14]. - The actual controller Zheng Mu received a combined prison sentence of 7 years and 6 months for multiple offenses, including fraud and failure to disclose important information [4][14]. - Other executives, including Luo Tiewei and Li Yanxia, received varying prison sentences, with the highest being 7 years for Luo Tiewei [5][15]. Company Background - Zijing Storage was established on April 15, 2010, and primarily engaged in the research, manufacturing, and sales of storage devices [6][18]. - The company was listed on the National Equities Exchange and Quotations (NEEQ) in April 2016 and later on the Sci-Tech Innovation Board in February 2020, raising a total of 1.023 billion RMB [7][19]. Financial Misconduct - From 2017 to 2019, the company engaged in financial fraud, including inflating revenue and profits through false contracts and documents [7][19]. - The inflated profits accounted for 34.83% of total profits in 2017 and 32.25% in 2018, with 42.97% of revenue in the first half of 2019 being fraudulent [8][19]. Performance Decline - After going public, the company's performance deteriorated, with a revenue drop of 6.69% in 2021 and a net loss of 229 million RMB, a decline of 379.85% [8][20]. - The company faced regulatory scrutiny and was investigated for information disclosure violations, leading to its delisting in July 2023 [9][20]. Investor Compensation - The case set a precedent for investor compensation in the Sci-Tech Innovation Board, with intermediary institutions committing 1.275 billion RMB for investor payouts [9][21]. - By June 30, 2023, 97.22% of affected investors had reached settlements, receiving a total of 1.086 billion RMB in compensation [9][21].

Core Viewpoint - The recent criminal judgment against Guangdong Ziqing Information Storage Technology Co., Ltd. (Ziqing Storage) highlights the consequences of financial fraud, resulting in prison sentences for the actual controllers and significant fines for the company [2][3]. Summary by Sections Criminal Judgment - Ziqing Storage received a criminal judgment from the Meizhou Intermediate People's Court, with the company fined 37 million RMB for fraudulently issuing securities [2]. - Ten individuals, including the actual controllers Zheng Mu and Luo Tiewei, were sentenced to prison, with the longest term being seven years and six months [2]. Financial Fraud Details - The company was accused of fraudulently issuing securities to achieve its listing goals, involving inflated revenue and profits through fake contracts and documents from 2016 to 2018 [2]. - The total amount raised through three rounds of capital increases was approximately 413.4 million RMB, with significant profit inflation reported: 34.83% in 2017, 32.25% in 2018, and 42.97% in the first half of 2019 [2]. Violations of Information Disclosure - After going public, Ziqing Storage continued to misrepresent its financial performance, leading to false disclosures in annual reports from 2019 to 2021, which harmed shareholders and investors [3]. Investor Compensation - Nearly 17,000 investors have received over 1 billion RMB in compensation due to the company's fraudulent activities, with a high percentage of claims processed within a short timeframe [4][5]. - The China Securities Regulatory Commission (CSRC) has taken measures to ensure that affected investors can continue to claim compensation [5]. Involvement of Intermediaries - Four intermediary institutions, including CITIC Securities and accounting firms, were implicated in the case and agreed to pay a total of approximately 1.275 billion RMB in commitment funds to cover investor losses and ensure compliance [6]. - The CSRC has concluded its investigation into these intermediaries after they fulfilled their obligations under the commitment agreement [6]. Future Legal Actions - Investors who did not apply for compensation within the designated period may pursue civil litigation against Ziqing Storage and related parties for damages [7].

Core Viewpoint - The Guangdong Zijing Information Storage Technology Co., Ltd. has been sentenced for securities fraud, resulting in the imprisonment of 10 individuals, including the actual controllers, with the longest sentence being seven years and six months [2][11]. Group 1: Legal Proceedings and Sentencing - The company was found guilty of fraudulently issuing securities and was fined 37 million yuan [2][11]. - The actual controllers, Zheng Mu and Luo Tiewei, along with the former financial director, Li Yanzha, received prison sentences, with the maximum being seven years and six months [2][11]. - The company has ceased operations following the court's ruling [12]. Group 2: Financial Misconduct Details - The company was accused of inflating revenue and profits through false contracts and forged documents from 2017 to 2019, leading to significant misrepresentation in financial statements [3][4]. - The total amount raised through three rounds of capital increases from 2016 to 2018 was approximately 413.4 million yuan [3][14]. - The inflated profits accounted for 34.83% of total profits in 2017 and 32.25% in 2018, with 42.97% of revenue in the first half of 2019 being falsely reported [14]. Group 3: Investor Compensation - Nearly 17,000 investors have received over 1 billion yuan in compensation due to the company's fraudulent activities [5][16]. - The total loss for affected investors was estimated at approximately 1.097 billion yuan, with 16,986 investors compensated, representing 97.22% of the total affected [7][16]. - The compensation process involved a combination of administrative commitments and advance payments from the investor protection fund [7][17]. Group 4: Regulatory Actions and Future Implications - The company was delisted from the Shanghai Stock Exchange due to severe violations of listing rules [6][16]. - Four intermediary institutions involved in the case have paid a total of approximately 1.275 billion yuan in commitment funds and have undergone self-inspection and rectification [8][17]. - The deadline for eligible investors to apply for compensation has ended, and those who missed the deadline may pursue civil litigation for damages [9][18].

Core Viewpoint - The recent criminal judgment against Guangdong Ziqing Information Storage Technology Co., Ltd. (Ziqing Storage) highlights the severe consequences of financial fraud, with the actual controllers and several executives sentenced to prison, and the company facing significant penalties and operational cessation [1][4][5]. Group 1: Criminal Judgment and Penalties - Ziqing Storage was found guilty of fraudulently issuing securities, resulting in a fine of RMB 37 million [3][6]. - The actual controllers, Zheng Mu and Luo Tiewei, along with eight others, received prison sentences, with the longest being seven years and six months [4][6]. - The company has ceased operations following the judgment [5]. Group 2: Financial Fraud Details - From 2016 to 2018, Ziqing Storage raised a total of RMB 413.4 million through three rounds of capital increases, while engaging in fraudulent activities to inflate revenue and profits [6]. - The fraudulent profit inflation was significant, with 34.83% of the 2017 profit being artificially inflated, and 42.97% of the revenue in the first half of 2019 being falsely reported [6][7]. - The company failed to disclose external guarantees amounting to RMB 125 million, further compounding the fraudulent activities [6]. Group 3: Investor Compensation - Nearly 17,000 investors have received over RMB 1 billion in compensation due to the fraud, with a high percentage of claims processed within a short timeframe [8][10]. - The China Securities Regulatory Commission (CSRC) has taken steps to ensure that affected investors can continue to seek compensation through the Investor Protection Fund [10][12]. Group 4: Regulatory Actions - Following the fraud, Ziqing Storage's stock was delisted from the Shanghai Stock Exchange due to severe violations of listing rules [10]. - Four intermediary institutions involved in the case have agreed to pay a total of approximately RMB 1.275 billion in commitment funds as part of their accountability [11][12].