Five years after delisting, the first-instance judgment for the securities false statement liability dispute involving Shandong Longli Biotechnology Co., Ltd. ("Longli Biology") has been issued. The court initiated ordinary representative litigation proceedings, with a total of 1,618 investors joining the lawsuit as plaintiffs.

According to the judgment by the Jinan Intermediate People's Court of Shandong Province ("Jinan Intermediate Court"), the 1,618 plaintiffs collectively hold investment difference loss claims of 274 million yuan against Longli Biology and legal fee claims of 809,000 yuan. Five plaintiff representatives also hold notification fee claims of 80,600 yuan against Longli Biology. Defendant Cheng Shaobo bears joint liability for the aforementioned debts of Longli Biology, while other defendants bear joint liability within certain proportional ranges.

Regarding intermediary institutions, Guolian Minsheng Securities Company Limited bears joint compensation liability within 5% of the plaintiffs' various losses, while Lithin CPA bears joint compensation liability within 30% of the plaintiffs' various losses. On the evening of August 26, Guolian Minsheng Securities issued a progress announcement regarding its subsidiary's major litigation, disclosing this matter.

**1,618 Investors Awarded Over 270 Million Yuan in Compensation**

Longli Biology was listed on the Shenzhen Stock Exchange's SME Board on July 28, 2011, with stock code 002604, belonging to the agriculture, forestry, animal husbandry, and fishery sector, and was once known as the "first biofuel stock."

On January 19, 2018, "Longli Biology" was subject to other risk warnings and changed to "ST Longli." On June 1, 2020, the Shenzhen Stock Exchange decided to terminate the listing of "ST Longli," entering the delisting consolidation period, with the stock name changed to "Longli退." In July 2020, "Longli 退" was officially delisted from the Shenzhen Stock Exchange and now trades on the National Equities Exchange and Quotations system.

Previously, due to prominent systematic fraud, Longli Biology was specifically mentioned by the China Securities Regulatory Commission (CSRC). The CSRC pointed out that from 2015 to the first half of 2017, Longli Biology regularly implemented fraud by deleting and modifying financial accounting records to artificially inflate company profits.

The CSRC ultimately decided to order Longli Biology to make corrections, issue a warning, and impose a fine of 600,000 yuan. It also warned Cheng Shaobo, who was then the legal representative, chairman, and actual controller of Longli Biology, and imposed a total fine of 1.5 million yuan. The cumulative fine amount for 18 responsible parties totaled 3.38 million yuan.

However, delisting was not the end. Previously, in August 2022, Guolian Securities (now renamed Guolian Minsheng Securities) issued an "Announcement on Major Litigation of Subsidiary." The company's wholly-owned subsidiary Huaying Securities (renamed "Guolian Minsheng Securities Company Limited") received a "Court Summons" served by the Jinan Intermediate Court, involving over 1,600 investors suing Longli Biology, Huaying Securities, and Lithin CPA. It was reported that Li Liqun and 1,627 other investors were plaintiffs, requesting the court to order Longli Biology to compensate each plaintiff for investment difference losses, commission and stamp tax losses, etc., and order Cheng Shaobo and 12 other natural persons, Huaying Securities, and Lithin CPA to bear joint compensation liability.

Three years later, this collective lawsuit spanning several years has finally reached judgment. According to the first-instance judgment by the Jinan Intermediate Court, the 1,618 plaintiffs collectively hold investment difference loss claims of 274 million yuan against Longli Biology and legal fee claims of 809,000 yuan. Five plaintiff representatives also hold notification fee claims of 80,600 yuan against Longli Biology. Defendant Cheng Shaobo bears joint liability for the aforementioned debts of Longli Biology, while other defendants bear joint liability within certain proportional ranges.

Regarding intermediary institutions, Guolian Minsheng Securities Company Limited bears joint compensation liability within 5% of the plaintiffs' various losses, and Lithin CPA bears joint compensation liability within 30% of the plaintiffs' various losses, to be paid within thirty days from the effective date of the judgment.

**Pursuing Primary Culprits and Enforcing Gatekeeper Responsibilities**

On the evening of August 26, Guolian Minsheng Securities issued a progress announcement regarding its subsidiary's major litigation, disclosing this matter.

Guolian Minsheng Securities stated that given that after the first-instance judgment of this litigation case, both plaintiffs and defendants may submit appeal statements to the Jinan Intermediate Court within the statutory period, appealing to the Shandong Provincial Higher People's Court. The final judgment result of this litigation case still has uncertainties. The company's current financial condition is stable with normal operations, and the amount involved in this litigation matter will not have a significant adverse impact on the company's current or future profits.

Five years after delisting, the securities false statement liability dispute of Longli Biology has finally reached its first-instance judgment.

From the judgment results, the Jinan Intermediate Court determined specific civil liabilities based on the different circumstances of each defendant, adhering to the principle of "pursuing primary culprits, cracking down on accomplices, and enforcing gatekeeper responsibilities," while also maintaining the principle of "proportionate responsibility" to precisely hold intermediary institutions accountable, avoiding significant imbalance between their duty of care, capability of care, and compensation liability.