Financial Fraud "Penalties" Land, *ST Mubon Chairman Liao Zhiyuan Resigns, Can "Post-95s" Related Party "Step into the Spotlight" Resolve Company's Predicament?

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Daily Economic News Reporter | Chen Pengli Daily Economic News Editor | Zhang Yiming

On the evening of March 20, *ST Muboang (rights protection) (SH603398, stock price 11.27 yuan, market value 4.887 billion yuan) issued multiple announcements, with significant information.

First, the company and related parties received the “Administrative Penalty Decision” from the Jiangxi Securities Regulatory Bureau due to issues such as false statements in periodic reports and failure to disclose related-party transactions as required. The company was fined 7 million yuan, its actual controller and then-chairman Liao Zhiyuan was fined 8 million yuan and banned from securities market activities for six years.

Meanwhile, *ST Muboang also announced a major personnel change. The former chairman and general manager, Liao Zhiyuan, resigned for “personal reasons” and will no longer hold any position. The board of directors appointed director Liao Zhipeng, born in 1998, to serve as acting chairman and general manager.

On one side are heavy regulatory penalties and the exit of the actual controller; on the other side is a “post-95” young executive stepping into the spotlight. However, this young manager faces the reality that *ST Muboang has already been warned of delisting risk, facing dual risks of revenue decline and internal control issues. Additionally, the company still has large amounts of illegally used raised funds that have not been repaid.

Jiangxi Securities Regulatory Bureau Penalty Officially Enforced

After nearly eight months of investigation, *ST Muboang’s financial fraud case finally received regulatory confirmation.

Following the company’s disclosure at the end of February that it and related parties received the “Notice of Administrative Penalty” beforehand, on March 20, the company and involved parties received the “Administrative Penalty Decision” from Jiangxi Securities Regulatory Bureau.

It was confirmed that *ST Muboang committed two major violations: false statements in periodic reports and non-disclosure of related-party transactions as required.

Specifically, in 2023 and the first half of 2024, *ST Muboang, through its subsidiaries, fabricated business operations, artificially inflating revenue by 516 million yuan and 198 million yuan respectively, accounting for 31.17% and 45.49% of the disclosed revenue for those periods; inflated total profits by 159 million yuan and 75 million yuan, representing 536.60% and 46.50% of the disclosed profits. These manipulations caused the “2023 Annual Report” and “2024 Semi-Annual Report” to contain serious false records.

In addition to financial data “inflation,” the company also had serious issues with misappropriation of funds. The penalty decision shows that in 2024, *ST Muboang’s non-operating fund transactions with its actual controller Liao Zhiyuan and other related parties totaled up to 1.204 billion yuan, accounting for 128.98% of the audited net assets. Among these, non-operating fund occupation by Liao Zhiyuan amounted to 168 million yuan, and by other related party Zhang Zhong’an amounted to 1.036 billion yuan. The company failed to disclose these related-party non-operating fund occupations in a timely manner, resulting in significant omissions in the 2024 annual report.

Based on these violations, Jiangxi Securities Regulatory Bureau ordered *ST Muboang to correct the issues, issued a warning, and fined 7 million yuan; fined Liao Zhiyuan a total of 8 million yuan and banned him from securities market activities for six years. The bureau also warned four responsible persons including Zhang Zhong’an and fined them between 1 million and 3.5 million yuan each; Zhang Zhong’an was also banned from securities market activities for six years.

On the same day the penalty was announced, the board of *ST Muboang also received a written resignation letter from Liao Zhiyuan. The announcement states that Liao Zhiyuan resigned from all positions including director, chairman, and general manager for personal reasons, and will no longer hold any role in the company.

“Post-95” Director Liao Zhipeng Acts as Interim Leader

Public information shows that Liao Zhiyuan took control of *ST Muboang in January 2021 (then called Bangbao Yizhi). Born in 1987, he is currently under 40 years old. From November 2021 to September 2022, he served as the company’s general manager, and since November 2021, he has been chairman.

After Liao Zhiyuan’s swift departure, *ST Muboang held a board meeting on March 20, appointing director Liao Zhipeng to serve as acting chairman and general manager.

Notably, Liao Zhipeng’s resume shows he was born in 1998, making him 28 years old. He will become a staff director starting April 2025. The company’s announcement states that Liao Zhipeng has a related relationship with Liao Zhiyuan, though the nature of this relationship was not specified.

This “post-95” acting chairman faces a challenging crisis. First, the imminent delisting risk. *ST Muboang’s stock has been under delisting warning since May 6, 2025. According to regulations, if the company’s audited revenue after deductions in 2025 is below 3 billion yuan and net profit is negative, or if the 2025 financial statements and internal control reports are issued with non-unqualified opinions, the stock will be delisted.

Based on the company’s disclosures, both risks are high. In response to inquiries from the Shanghai Stock Exchange, the company admitted that the auditor has issued a special explanation, indicating uncertainty whether the revenue after deductions in 2025 will exceed 3 billion yuan. Additionally, due to unresolved major flaws in the 2024 internal control audit report, auditors are expected to issue a non-unqualified opinion on the company’s internal control for 2025.

The fallout from internal control failure also includes: recently, the company responded to the SSE’s inquiry, revealing that there is still 646 million yuan of raised funds illegally used that have not been repaid.

In summary, this young “acting leader” faces many tests. Whether he can lead *ST Muboang out of its predicament remains to be seen.