ST Zhizhi (603869.SH) and related personnel for falsifying annual reports for several years are to be fined a total of more than 20 million yuan by the China Securities Regulatory Commission

Zhitong Finance App News, ST Zhizhi (603869.SH) issued an announcement. On November 25, 2024, the company received the “Advance Notice of Administrative Penalty” (Gui Penalty Letter (2024) No. 2) issued by the China Securities Regulatory Commission. The facts that Xinzhi Cognition is suspected of breaking the law are as follows: Xinzhi Cognition's 2019 Annual Report, 2020 Annual Report, and 2021 Annual Report contain false records.

Xinzhi acknowledged that during the period involved, the directors and senior management concerned allegedly violated the provisions of Section 82 (3) of the Securities Law and constituted “directly responsible supervisors and other directly responsible persons” as described in section 197 (2) of the Securities Law. Zhang Yadong served as the director and chairman of Xinzhi Cognition from September 2019 to April 2022; Zhang Yanfeng served as the vice president, board secretary, and financial director of Xinzhi Cognition since December 2018; Yang Rui served as the president and director of Xinzhi Cognition from June 2018 to May 2021; Xie Xin served as vice president of Xinzhi Cognition from September 2018 to April 2022; and Wang Xi served as the executive vice president, director, and audit committee member of Xinzhi Cognition since July 2019.

Zhang Tao served as the director of Xinzhi Cognitive from December 2016 to March 2020. He did not sign the above 3 annual reports. From June 2010 to August 2022, he served successively as the executive director, chairman, and director of Xinzhi Cognitive Data Service Co., Ltd. Zhang Tao organized and carried out the false business described above. Its actions have a direct causal relationship with the illegal disclosure of information in Xinzhi Cognitive's annual reports. He is the other person directly responsible for Xinzhi Cognition's other illegal acts of information disclosure, and is responsible for the false records in Xinzhi Cognition's 2019 Annual Report, 2020 Annual Report, and 2021 Annual Report.

According to the facts, nature, circumstances and degree of social harm of the person concerned, according to the provisions of Section 197 (2) of the Securities Law, the China Securities Regulatory Commission intends to decide: 1. Order the correction, give a warning, and impose a fine of 8.5 million yuan on Xinzhi Cognitive Digital Technology Co., Ltd.; 2. Give a warning to Zhang Yadong and impose a fine of 4.3 million yuan; 3. Give a warning to Zhang Yanfeng and Zhang Tao, and fine 3.2 million yuan respectively; 5. Warn Yang and Xie Xin and impose a fine of 2.1 million yuan respectively; 5. Give a warning to Wang Rui, and a fine of 1.5 million yuan was imposed. Zhang Yadong was banned from entering the securities market for 6 years, and Zhang Tao and Zhang Yanfeng were banned from entering the securities market for 3 years, respectively.