Core Viewpoint - The recent criminal measures taken against two senior executives of Ruiskanda (603803.SH) highlight the escalating accountability in the aftermath of the "special network communication" fraud case, which has severely impacted the company's financial health and market perception [1][6][7]. Company Overview - Ruiskanda is a provider of optical network products and system solutions, with operations in various fields including all-optical networks, switching routing, cloud network security integration, wireless communication, and edge computing [9]. Legal and Regulatory Actions - On July 7, 2025, Ruiskanda announced that its chairman and general manager, Li Yuejie, and director Zhu Chuncheng were taken into criminal custody for suspected violations related to the disclosure of important information, linked to a prior administrative penalty from the China Securities Regulatory Commission (CSRC) in September 2023 [1][2][6]. - The CSRC's 2023 administrative penalty revealed that Ruiskanda had inflated its revenue by over 630 million yuan and profits by over 110 million yuan from 2019 to 2020 through false self-circulation transactions [6][7]. Financial Performance - The company's financial performance has deteriorated significantly, with cumulative losses reaching 1.054 billion yuan from 2021 to 2024. Revenue figures for these years were 1.853 billion yuan, 2.156 billion yuan, 1.626 billion yuan, and 1.382 billion yuan, indicating a declining trend [10][11]. - In Q1 2025, Ruiskanda reported a revenue of 250 million yuan, a year-on-year decline of 34.89%, and a net profit loss of 19 million yuan, marking a staggering year-on-year drop of 195.18% [10]. Market Reaction - Following the announcement of the criminal measures against the executives, Ruiskanda's stock price plummeted, hitting the daily limit down on July 8, 2025, closing at 8.6 yuan per share. This represented a significant market reaction, with a net outflow of 38.65 million yuan in a single day, the highest for the year [11][12]. - Notably, the stock had previously surged over 300% from March to December 2024, despite the underlying financial struggles [11]. Executive Compensation - Despite the ongoing financial decline, the compensation for the implicated executives remained high, with each receiving approximately 1.25 million yuan annually from 2021 to 2024, totaling around 10 million yuan over four years [11].

Core Viewpoint - The company Risconda (SH603803) is facing significant legal and operational challenges due to the criminal charges against its chairman and general manager, Li Yuejie, and board member Zhu Chuncheng, related to the violation of information disclosure laws, which are linked to a previous financial fraud case involving inflated revenues and profits [1][6]. Company Background - Risconda was founded in 1996 by Li Yuejie and others, initially focusing on fiber optic transceivers and quickly gaining market share through cost reduction and customized services [2]. - The company has undergone four development phases, achieving revenue growth from 10 million yuan in 1999 to over 2 billion yuan by 2017, and has recently focused on "dual-gigabit networks" as part of national infrastructure initiatives [2]. Financial Misconduct - The company was penalized by the China Securities Regulatory Commission (CSRC) in September 2023 for financial fraud, which included inflating revenues by approximately 632 million yuan and net profits by about 117 million yuan during 2019-2020 [3][6]. - The fraudulent activities involved a subsidiary, Beijing Deep Blue Xun Tong Technology Co., which engaged in a fictitious business model that lacked substance, leading to significant misreporting in annual reports [5][6]. Recent Performance - Risconda has experienced considerable revenue volatility over the past five years, with three instances of annual revenue decline and three years of net losses [7]. - In Q1 2023, the company reported a 34.89% year-on-year revenue decline and a net loss of 19 million yuan, indicating a shift from profitability to losses [7][9]. Market Reaction - Despite the financial and legal troubles, Risconda's stock has seen speculative trading, driven by market interest in technologies such as CPO (Co-Packaged Optics) and 6G, leading to multiple instances of stock price surges earlier in the year [10].