CSRC Beijing Bureau Administrative Penalty Decision No. [2025]16
Original publication date: September 10, 2025
Following investigation, Huayang Lianzhong Digital Technology Co., Ltd. (hereinafter referred to as "the Company" or "Huayang Lianzhong") was found to have committed the following violations:
**I. Failure to Disclose Non-Operating Capital Occupation by Controlling Shareholders and Actual Controllers, Resulting in Material Omissions in Periodic Reports**
In 2021, Huayang Lianzhong and its wholly-owned subsidiary Beijing Huayang Chuangxiang Advertising Co., Ltd. provided a cumulative total of RMB 181.53 million to Su Tong, the Company's controlling shareholder and actual controller, through Beijing Jiashi Zhaofeng Investment Management Co., Ltd., constituting non-operating capital occupation by the controlling shareholder and actual controller.
In its 2021 interim report and 2021 annual report, Huayang Lianzhong failed to disclose the non-operating capital occupation by its controlling shareholder and actual controller totaling RMB 181.53 million, representing 10.02% and 7.84% of the disclosed net assets for the respective periods.
In its 2021 interim report, 2021 annual report, 2022 interim report, 2022 annual report, and 2023 interim report, Huayang Lianzhong failed to disclose the outstanding balance of non-operating capital occupation by its controlling shareholder and actual controller of RMB 181.53 million, representing 10.02%, 7.84%, 7.91%, 11.73%, and 12.07% of the disclosed net assets for the respective periods.
As of December 31, 2023, Huayang Lianzhong had recovered the aforementioned occupied funds.
According to relevant regulations, these matters should have been disclosed in the 2021 interim report, 2021 annual report, 2022 interim report, 2022 annual report, and 2023 interim report. Huayang Lianzhong's failure to disclose as required resulted in material omissions in the relevant periodic reports, violating Article 78, Paragraph 2 of the Securities Law and constituting the violation described in Article 197, Paragraph 2 of the Securities Law.
**II. Under-Provision of Bad Debt Allowances for Accounts Receivable, Resulting in False Records in Periodic Reports**
Huayang Lianzhong under-provided bad debt allowances for accounts receivable from Beijing Xinnuo Kejie Trading Co., Ltd., resulting in inflated total profits of RMB 17.33 million and RMB 69.39 million in its 2021 annual report and 2022 annual report respectively, representing 6.72% and 10.31% of the disclosed total profits for the respective periods.
On July 10, 2025, Huayang Lianzhong published an "Announcement on Correction and Retrospective Adjustment of Prior Period Accounting Errors," correcting the relevant financial information.
The false records in Huayang Lianzhong's 2021 annual report and 2022 annual report violated Article 78, Paragraph 2 of the Securities Law and constituted the violation described in Article 197, Paragraph 2 of the Securities Law.
The aforementioned violations are substantiated by evidence including bank account records, inquiry transcripts, statements, and company announcements.
Su Tong served as Chairman and General Manager of Huayang Lianzhong and organized and arranged the non-operating capital occupation and under-provision of bad debt allowances. Guo Jianjun served as Deputy General Manager, CFO, and Board Secretary of Huayang Lianzhong and was aware of the non-operating capital occupation and under-provision of bad debt allowances. Both Su Tong and Guo Jianjun signed guarantees for the truthfulness, accuracy, and completeness of Huayang Lianzhong's relevant periodic reports but failed to exercise due diligence.
According to Article 82, Paragraph 3 of the Securities Law, Su Tong and Guo Jianjun are directly responsible supervisory personnel for Huayang Lianzhong's information disclosure violations. Additionally, as the controlling shareholder and actual controller of Huayang Lianzhong, Su Tong organized and arranged the non-operating capital occupation and under-provision of bad debt allowances, constituting the circumstance described in Article 197, Paragraph 2 of the Securities Law regarding "controlling shareholders and actual controllers organizing and directing the aforementioned violations."
Huayang Lianzhong, Su Tong, and Guo Jianjun demonstrated mitigating circumstances including acknowledging their errors and accepting penalties.
Based on the facts, nature, circumstances, and social harm of the parties' violations, and in accordance with Article 197, Paragraph 2 of the Securities Law, this Bureau decides:
1. Order Huayang Lianzhong Digital Technology Co., Ltd. to make corrections, issue a warning, and impose a fine of RMB 5 million;
2. Issue a warning to Su Tong and impose a fine of RMB 7.5 million, including RMB 5 million as controlling shareholder and actual controller, and RMB 2.5 million as directly responsible supervisory personnel;
3. Issue a warning to Guo Jianjun and impose a fine of RMB 2 million.
The aforementioned parties shall remit the fines directly to the national treasury within 15 days of receiving this penalty decision. They must also submit copies of payment vouchers bearing the parties' names to the Administrative Penalty Committee Office of the China Securities Regulatory Commission and Beijing CSRC Bureau for filing.
If any party disagrees with this penalty decision, they may apply for administrative review to the China Securities Regulatory Commission within 60 days of receiving this decision, or directly file an administrative lawsuit with a competent people's court within 6 months of receiving this decision. The above decision shall remain in effect during the review and litigation period.