Huizhou intelligent tech fined 500m yuan by CSRC for fabricating revenues

Huizhou Intelligent Technology Group Co., Ltd. has received an Administrative Penalty Decision from the China Securities Regulatory Commission (CSRC) for information disclosure violations. An investigation revealed that Huizhou Intelligent's subsidiaries, Beijing Rerao Culture Technology Co., Ltd. and Beijing Zhongke Huashi Culture Media Co., Ltd., fabricated business activities from 2019 to 2020.

These fraudulent activities resulted in an overstatement of revenue by 5,990.19 million yuan and 9,688.56 million yuan for 2019 and 2020, respectively, accounting for 5.08% and 13.42% of reported revenue. Cumulative profit was overstated by 1,415.84 million yuan and 1,777.05 million yuan, representing 0.88% and 8.72% of reported profit. The CSRC has imposed a fine of 500 million yuan on Huizhou Intelligent.

Key individuals including former chairman and general manager Wu Jianfei, former deputy general manager and director Jiang Xueqian, former CFO Chen Yingying, and former board secretary Wu Ning also received warnings and individual fines ranging from 150 million yuan to 250 million yuan for their roles in the misconduct. The company confirmed it has corrected the prior accounting errors and received a performance compensation payment of 4,143.5948 million yuan from Xuzhou Mude Information Technology Co., Ltd.