The China Securities Regulatory Commission (CSRC) has issued an advance notice of administrative penalties to Datang Gaohong Network Co., Ltd. (*ST Gaohong), a Shenzhen Stock Exchange main-board listed company, for suspected information disclosure violations after finding it materially overstated revenue and profits through transactions lacking commercial substance. Investigators found the company had long conducted laptop and other “round-tripping” and “order-walking” business with no commercial substance, substantially inflating revenue and profit in breach of securities laws and regulations. The CSRC intends to fine the relevant responsible parties a total of CNY 160 million and impose a further CNY 7 million fine on third parties that cooperated in the falsification. The CSRC indicated the case may meet conditions for mandatory delisting due to major violations, and the Shenzhen Stock Exchange will initiate delisting procedures in accordance with the law. Any suspected criminal leads will be transferred to public security authorities under the Criminal Law and the applicable case-filing and prosecution standards issued by the Supreme People’s Procuratorate and the Ministry of Public Security.
China Securities Regulatory Commission 2025-08-08
China Securities Regulatory Commission proposes CNY 160m penalties for *ST Gaohong over sham trading that inflated disclosures and may trigger mandatory delisting
The China Securities Regulatory Commission (CSRC) has issued an advance notice of administrative penalties to Datang Gaohong Network Co., Ltd. for suspected information disclosure violations, including materially overstating revenue and profits. The CSRC plans to fine responsible parties CNY 160 million and third parties CNY 7 million, with potential mandatory delisting by the Shenzhen Stock Exchange. Suspected criminal leads will be transferred to public security authorities for further investigation.