Guizhou Bailing engaged in financial fraud for 4 years; former chairman banned from the market for 10 years

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Translated from: China Business Network

By Jing reporter Yan Guowen and Lu Zhikun, Beijing

(Decision by the Shenzhen Stock Exchange on disciplinary action against Guizhou Baili. Notice/Screenshot)

On March 27, Guizhou Baili (002424.SZ), a leading publicly listed company in Miao pharmaceutical products, disclosed that the company and relevant parties each received an “Administrative Penalty Decision” issued by the Guizhou Securities Regulatory Bureau.

The “Administrative Penalty Decision” shows that in 2019, Guizhou Baili understated selling expenses by 350 million yuan, overstated profits by 350 million yuan, accounting for 95.73% of the total profit for the period as recorded in the current reports (absolute value); in 2020, it understated selling expenses by 241 million yuan, overstated profits by 241 million yuan, accounting for 115.35% of the total profit for the period as recorded in the current reports (absolute value); in 2021, it understated selling expenses by 64 million yuan, overstated profits by 64 million yuan, accounting for 45.04% of the total profit for the period as recorded in the current reports (absolute value); in 2023, it overstated selling expenses by 459 million yuan and understated profits by 459 million yuan, accounting for 93.17% of the total profit for the period as recorded in the current reports (absolute value).

These financial frauds led to the existence of false records in Guizhou Baili’s annual reports for 2019, 2020, 2021, and 2023.

The Guizhou Securities Regulatory Bureau imposed a fine of 10 million yuan on Guizhou Baili; imposed a fine of 5 million yuan on Jiang Wei (the former chairman of Guizhou Baili) and took a 10-year ban from the securities market; imposed a fine of 3.5 million yuan on Niu Min (the former director of Guizhou Baili, as well as the general manager and the secretary to the board of directors); and imposed fines on the other seven former senior executives of 2 million yuan, 1.5 million yuan, 800,000 yuan, 600,000 yuan, 500,000 yuan, 500,000 yuan, and 500,000 yuan, respectively.

At the same time, the Shenzhen Stock Exchange imposed a disciplinary sanction of public censure on Guizhou Baili, Jiang Wei, Niu Min, and the other seven former senior executives.

On March 26, Jiang Wei resigned from positions including chairman and director of Guizhou Baili. After resigning, Jiang Wei no longer held any position at Guizhou Baili.

Guizhou Baili stated that as of the date of disclosure of this announcement, the company’s production and operations management and business activities are all normal. The company’s board of directors extends its sincere apologies to the vast number of investors regarding this matter. The company and relevant personnel will seriously draw lessons from experience, improve internal control systems, enhance the company’s corporate governance level, strictly comply with relevant laws and regulations, continuously improve the quality of the company’s information disclosure, and faithfully fulfill its information disclosure obligations in a manner that is true, accurate, complete, timely, and fair, in order to safeguard the interests of the company and its shareholders.

(Editor: Cao Xueping, Review: Tong Haihua, Proofreading: Yan Jingning)

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