ST Dongshi and some responsible persons received the Beijing Securities Regulatory Bureau's prior notice of administrative penalties. The 2022 financial report inflated profits by up to 82.33%.

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Oriental Fashion Driving School Co., Ltd. (Stock abbreviation: ST Dongshi (Rights Protection), Stock code: 603377) and some responsible persons received the “Administrative Penalty Advance Notice” (〔2026〕3) issued by the Beijing Regulatory Bureau of the China Securities Regulatory Commission (hereinafter referred to as “Beijing Securities Regulatory Bureau”) on March 20, 2026. The Beijing Securities Regulatory Bureau found that the company did not account for its subsidiary’s land leasing business in 2022, resulting in false records in both the semi-annual and annual reports, with the inflated profit amount accounting for as much as 82.33% of the disclosed total profit for the period. The company and relevant responsible persons face a total fine of 4.4 million yuan.

According to the investigation by the Beijing Securities Regulatory Bureau, ST Dongshi did not account for the land leasing business of its subsidiary Chongqing Oriental Fashion Driving Training Co., Ltd. in 2022, underreporting management expenses and financial expenses, which led to false records in the company’s 2022 semi-annual report and 2022 annual report. Specifically, the semi-annual report for 2022 inflated profits by 9.4029 million yuan, accounting for 30.97% of the disclosed total profit for the period; the annual report for 2022 inflated profits by 18.9310 million yuan, accounting for 82.33% of the disclosed total profit for the period. The company issued an announcement on April 30, 2024, regarding “Correction of Prior Period Accounting Errors and Retrospective Adjustments,” proactively correcting and making retrospective adjustments to the 2022 financial statements.

The Beijing Securities Regulatory Bureau believes that the above actions of ST Dongshi violate the provisions of Article 78, Paragraph 2 of the “Securities Law of the People’s Republic of China,” constituting illegal information disclosure. The then chairman Xu Xiong, the then general manager Yan Wenhui, and the then deputy general manager and chief financial officer and board secretary Wang Hongyu were recognized as directly responsible personnel for failing to perform their duties diligently, signing written confirmation opinions on relevant periodic reports and ensuring the content is true, accurate, and complete.

According to Article 197, Paragraph 2 of the “Securities Law,” the Beijing Securities Regulatory Bureau intends to make the following administrative penalty decision:

• Order Oriental Fashion Driving School Co., Ltd. to correct its actions, issue a warning, and impose a fine of 1.8 million yuan;
• Issue a warning to Xu Xiong and impose a fine of 1 million yuan;
• Issue a warning to Yan Wenhui and impose a fine of 800,000 yuan;
• Issue a warning to Wang Hongyu and impose a fine of 800,000 yuan.

The announcement shows that according to the relevant provisions of the “Shanghai Stock Exchange Stock Listing Rules (Revised April 2025),” this matter involves other risk warning situations but does not involve circumstances of serious violations necessitating mandatory delisting. The company stated that as of the date of this announcement, all business activities and operations are proceeding normally, and the above matters will not have a significant impact on the company’s production and operations. The company will continue to monitor the progress of these matters and strictly fulfill its information disclosure obligations.

Relevant parties may exercise their rights to make statements, defend themselves, and request a hearing within 5 working days from the receipt of the “Administrative Penalty Advance Notice.” The final result of this administrative penalty will be subject to the conclusions in the “Administrative Penalty Decision” issued by the Beijing Securities Regulatory Bureau.

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Editor: Xiao Lang Kuai Bao