The company has received a prior notice of administrative penalty from the Anhui branch of the China Securities Regulatory Commission.
The regulator has determined that the company's 2024 annual report contained false records, constituting a suspected violation of securities laws.
Concurrently, the company's stock abbreviation will be changed to "ST Winall," with the implementation of other risk warnings set to commence on June 30.
According to the facts established in the prior notice, the 2024 annual report of Winall Hi-Tech Seed Co.,Ltd. (SZSE: 300087) failed to accurately reflect the creditor-debtor relationship between its controlling subsidiary, Sichuan Winall Biotechnology Co., Ltd., and a company based in Guizhou.
Furthermore, despite being aware of the credit risk associated with the Guizhou company, the parent company did not assess its credit risk individually and make a corresponding provision for bad debt.
This omission resulted in an understatement of credit impairment losses by 18.7151 million yuan and an overstatement of total profit by the same amount in the 2024 annual report, representing 10.86% of the total profit disclosed for that period.
The Anhui regulator stated that the false records in the 2024 report constitute a suspected breach of relevant securities regulations.
At the time, Ying Minjie served as Chairman, Zhang Qin as Vice Chairman and General Manager, and Zhang Qingyi as Board Secretary and Chief Financial Officer.
They were legally responsible for ensuring the truthfulness, accuracy, and completeness of information disclosure.
Despite their knowledge of the creditor-debtor relationship and the associated credit risk, they failed to exercise sufficient and prudent consideration, persisting with the aging-combination method for bad debt provisioning.
This directly led to the false records in the 2024 report, and they are deemed the directly responsible supervisors.
Regarding these matters, the Anhui regulator intends to issue a warning to the company and impose a fine of 3 million yuan.
Warnings and fines of 1.5 million yuan each are proposed for Ying Minjie and Zhang Qin, while a warning and a fine of 1.3 million yuan are proposed for Zhang Qingyi.
The company stated that it convened a board meeting in January this year, reviewing and passing a proposal concerning the correction of prior accounting errors and retrospective adjustments.
It has conducted corrections and retrospective adjustments for the consolidated financial statements of 2024 and other periods.
The company expressed its commitment to learning from this experience, strengthening business monitoring and financial management of its subsidiaries, promptly tracking their operations, assets, and financial status to mitigate internal control risks.
Based on the circumstances outlined in the prior notice, the company will be subject to other risk warnings (ST) due to the false records in its disclosed 2024 annual report.
However, this situation does not trigger mandatory delisting for significant violations.
The stock's trading abbreviation will be changed to "ST Winall." Trading will be suspended for one day starting from the market open on June 29, 2026.
Trading will resume on June 30 with the formal implementation of the other risk warnings; the daily price fluctuation limit for stock trading will remain unchanged at 20%.