Sanqi Interactive Entertainment faces CSRC penalties for disclosure violations

Wuhu Sanqi Interactive Entertainment Network Technology Group Co., Ltd. and its executives, including chairman Li Weiwei and vice chairman Zeng Kaitian, face administrative penalties following a China Securities Regulatory Commission (CSRC) investigation. The violations detailed in the "Advance Notice of Administrative Penalty" include false records in annual reports regarding shareholder holdings from 2014 to 2020, where certain shares were held on behalf of Li Weiwei and Zeng Kaitian.

Additionally, Sanqi Interactive Entertainment failed to disclose related-party transactions in its 2018 annual report concerning the acquisition of Jiangsu Jiguang equity, and in 2020, regarding the indirect acquisition of Guangzhou Sanqi equity. Significant related-party transactions with Hainan Liyuan and other companies from 2018 to 2021, totaling 1.15 bn yuan, 1.08 bn yuan, 7.60 bn yuan, and 1.93 bn yuan, were also not disclosed in annual reports.

The CSRC proposes a warning and a fine of 900m yuan for Sanqi Interactive Entertainment. Chairman Li Weiwei faces a warning and a fine of 1.4 bn yuan, while Zeng Kaitian is proposed to receive a warning and a fine of 350m yuan. Other executives also face warnings and fines ranging from 25m yuan to 350m yuan. The company asserts that these penalties do not trigger forced delisting risk warnings.