Zhejiang Haikong Nankehua Iron faces significant penalties for disclosure violations

Zhejiang Haikong Nankehua Iron Digital Technology Co., Ltd. has received a preliminary notice of administrative penalty from the Zhejiang regulatory bureau of the China Securities Regulatory Commission, following an investigation into alleged information disclosure violations. The investigation concluded that the company failed to fully disclose terms in a significant "Computing Power Service Agreement" signed by its subsidiary, Huatie Dahongfeng, with an estimated contract value of 3.69 bn yuan.

Additionally, the company is accused of not timely disclosing significant progress or changes related to this major contract, including delays in the planned acceptance date. The scheduled acceptance date, initially by the end of April 2025, was extended twice by Huatie Dahongfeng on June 27, 2025, and August 29, 2025, with the agreement eventually terminated on September 30, 2025.

As a result, the company faces a proposed total fine of 8.00 m yuan. General manager and director Hu Danfeng faces a proposed fine of 4.00 m yuan, while chairman Zhang Qiao, and board secretary and deputy general manager Guo Haiwan, each face proposed fines of 2.60 m yuan. The company currently states that its operations are normal, and the penalty is not expected to significantly impact production and operations.