In a recent development, the controlling shareholder of the Chinese high-tech company Shangwei Holdings (603333.SH), Li Guangsheng, has been sentenced to 3 years and 2 months in prison for manipulating the securities market. His brother Li Guangyuan has also been sentenced to 11 years for offenses related to bribery and tax evasion involving issuing fake VAT invoices.
On December 15, Shangwei Holdings announced that the Zhejiang High Court rendered a final verdict sentencing Li Guangsheng to 3 years and 2 months in prison and imposed a fine of 7 million yuan. Additionally, 1 million yuan of illegally obtained funds seized during the second trial will be confiscated, with the remaining amount subject to further recovery.
Li Guangsheng was initially sentenced to 3 years and 10 months in the first trial, along with a 7 million yuan fine.
As of the market close on December 13, Shangwei Holdings’ A-shares hit the limit up at 5.53 yuan, with a total market value of 3.437 billion yuan. In the past two months, the company’s stock price has surged by over 50%.
Shangwei Holdings has disclosed that Li Guangsheng has submitted his resignation as chairman and CEO to the board of directors and will no longer hold any other positions within the company.
In 2016, Li Guangyuan, the actual controlling shareholder of the company, was sentenced to 11 years for similar offenses. Subsequently, Li Guangsheng, the brother of Li Guangyuan, took over as the new controlling shareholder. The company was later renamed Shangwei Holdings.
Public information reveals that Li Guangsheng, aged 51, is the controlling shareholder of Shangwei Holdings. As of September 30, 2024, Li Guangsheng directly owns 87.7216 million shares, accounting for 14.11% of the total share capital, while his brother Li Guangyuan owns 133 million shares, representing 21.44%.
Shangwei Holdings is a national high-tech enterprise engaged in the research, production, sales, and service of high-end special cable products.
On October 15, the company released its third-quarter report for 2024, showing a 25.34% year-on-year decrease in operating income to 1.198 billion yuan and a 37.32% decline in net profit attributable to shareholders to 189.976 million yuan, with earnings per share of 0.03 yuan.
Earlier, in June 2022, Shangwei Holdings received a notification from the family of Li Guangsheng, the controlling shareholder and actual controller of the company, indicating that Li Guangsheng had been criminally detained on suspicion of manipulating the securities and futures markets.
Li Guangsheng was subsequently released on bail pending trial.
Shangwei Holdings had previously garnered attention for its acquisition of shares in the live streaming company owned by Luo Yonghao at a premium of 28 times.