Suspected Fraudulent Issuance and Financial Falsification! Qingyue Technology Receives a Penalty of 1.73 Billion Yuan, and Intermediary Institutions Have Initiated Advance Compensation

Less than 4 years after listing, Qingyue Technology (Securities abbreviation: ST Qingyue, 688496.SH) has reached the brink of delisting.

On May 8, Qingyue Technology released an announcement regarding its receipt of the China Securities Regulatory Commission (CSRC) 《Administrative Penalty Pre-Notice》. The CSRC said that, due to suspected fraud issuance, violations and irregularities in information disclosure in periodic reports, and other issues, it plans to impose a fine of RMB 173 million on the listed company; and impose a total fine of RMB 33 million on four responsible individuals, along with a 4- to 8-year ban from the securities market. In addition, because Qingyue Technology is suspected of reaching circumstances involving major illegal mandatory delisting, the Shanghai Stock Exchange will, in accordance with law, initiate the delisting process.

On the same day, the CSRC’s official website disclosed that the CSRC has frozen accounts related to Qingyue Technology’s fund-raising proceeds. Guangfa Securities and Lixin Certified Public Accountants, as well as Qingyue Technology’s actual controller, have made public statements that they will make advance compensation to qualified investors who suffer losses, and have also commissioned the Investor Protection Agency to provide supporting services.

Financial fraud ran through before and after the IPO, with cumulative inflated profits exceeding 100 million

Qingyue Technology was established in 2010, with its main business being R&D, production, and sales of small- and mid-sized display panels such as PMOLED, e-paper module, and silicon-based OLED. Riding the spotlight of the national-level “specialized, refined, distinctive, and innovative” “little giant” enterprise title, Qingyue Technology listed on the STAR Market at the end of 2022, raising a total of RMB 824 million, with an oversubscription of about RMB 335 million. Guangfa Securities served as its sponsor; the recommending representatives were Liu Shijie and Zhao Ruimei.

However, less than 3 years after listing, in July 2025 Qingyue Technology received a warning letter issued by the Jiangsu Securities Regulatory Bureau due to issues including irregular use of fund-raising proceeds, non-compliant financial accounting for trade-related businesses, and failure to disclose related-party transactions. In October of the same year, Qingyue Technology was placed on file for investigation by the CSRC on suspicion of false financial data records in periodic reports, among other matters.

After several months of investigation, on May 8 the CSRC issued an 《Administrative Penalty Pre-Notice》, officially unveiling the full story of its financial fraud case. The company’s financial fraud began as early as the IPO declaration period. After listing, it continued to fabricate information in periodic reports, with cumulative inflated profits exceeding 100 million.

According to the CSRC’s findings, in 2021 Qingyue Technology intentionally understated inventory loss provisions, made false sales of chips, and other methods to inflate total profit by RMB 10.6549 million, accounting for 21.72% of the total profit for that year disclosed in the IPO application submission稿 and the registration稿. In the company’s disclosure documents for securities issuance, Qingyue Technology fabricated major false content.

From 2022 to the first half of 2023, Qingyue Technology repeated the same playbook: it intentionally understated inventory loss provisions, understated impairment losses on accounts receivable, made false sales of display modules, and failed to handle accounting for tax payments to be supplemented in a timely manner, among other issues. As a result, in 2022 and in the first half of 2023, it inflated total profit by RMB 45.4021 million and RMB 47.5360 million respectively, accounting for 104.58% and 145.10% of the total profit disclosed for the period. In addition, in 2023 Qingyue Technology failed to disclose in a timely manner the matter of supplementary export tax refunds of RMB 44.419 million, which accounted for 79.74% of the audited net profit for 2022.

The 《Administrative Penalty Pre-Notice》 shows that, pursuant to relevant provisions of the Securities Law, the CSRC plans to order Qingyue Technology to make corrections, issue a warning, and impose a fine of about RMB 173 million; it also plans to warn Qingyue Technology’s chairman and president Gao Yu di, deputy general manager Mu Xinji, chief financial officer, board secretary Zhang Xiaobo, chairperson of the board of supervisors, and general manager Wu Lei, and impose fines of RMB 10.5 million, RMB 9 million, RMB 7.5 million, and RMB 6 million respectively. It will also impose 8-year, 6-year, 5-year, and 4-year bans from the securities market on Gao Yu di, Mu Xinji, Zhang Xiaobo, and Wu Lei respectively.

Strict regulation keeps intensifying—“gatekeeper” Guangfa Securities launches advance compensation

On May 8, Qingyue Technology released a 《First risk warning announcement regarding the possibility that the company’s stock may be subject to mandatory delisting for major illegal violations》. The announcement states that, if, according to the conclusions of the administrative penalty decision, the company is found to be in circumstances involving major illegal mandatory delisting, the company’s stock will be delisted, and it will fully cooperate with the CSRC’s related work; the final outcome will be subject to the formal administrative penalty decision issued by the CSRC.

According to wind data, as of March 31 this year, Qingyue Technology still has 7,539 shareholders. While severely punishing illegal conduct, the CSRC has also increased investor protection efforts during the delisting process. On February 4 this year, the CSRC froze three securities accounts and seven bank accounts of Qingyue Technology, of which all seven bank accounts are募集资金专户 established by the company, with a combined frozen fund-raising principal of RMB 134 million.

Meanwhile, the regulatory push to hold intermediaries—the “gatekeepers”—accountable continues to intensify. On May 8, the CSRC said it is currently conducting investigations into the professional conduct of intermediaries. For suspected criminal leads that may be involved, the CSRC will adhere to the principle that relevant information should be transferred as much as possible, and strictly transfer the case to public security authorities in accordance with relevant provisions such as the Criminal Law.

To effectively safeguard investors’ legitimate rights and interests, this case introduces an advance compensation mechanism initiated by intermediaries. As Qingyue Technology’s IPO sponsor and lead underwriter, Guangfa Securities stated in its announcement that if Qingyue Technology is determined by the CSRC to have committed fraud issuance, made false statements, or other major illegal acts and is subject to administrative penalties, the board will agree for the company to proactively adopt advance compensation measures, including but not limited to: the company and related parties jointly contribute funds to establish a special fund for advance compensation in the Qingyue Technology event, to be used to compensate qualified investors in advance for investment losses.

In recent years, regulatory authorities have continued to maintain a “zero tolerance” posture, severely punishing various illegal and non-compliant behaviors in the capital market. From April 27 to 30, eight listed companies including Xi Wang Food, Bai’ao Chemical, and Zhongjian Technology successively announced that they received 《Filing and Investigation Notification Letters》 from the CSRC for “suspected violations and irregularities in information disclosure.” On May 8, the A-share listed company Yuan Dao Communications, due to suspected continuous financial fraud, was planned to be ordered to make corrections, receive a warning, be fined about RMB 239 million, and touch upon circumstances involving major illegal mandatory delisting.

Liu Junhai, a professor at the School of Law, Renmin University of China, said that regulators, by pursuing strict accountability and imposing top-tier penalties, further break the mindset of opportunistic profit-taking and keeping “sick” listings alive. As the market’s process of survival of the fittest speeds up, it forces companies to operate in compliance.