Hainan Puli Pharmaceutical Co., Ltd. (Puli Pharmaceutical) suspended trading on January 6 and resumed trading on January 7, with the company’s stock subject to delisting risk warning from the date of resumption. Experts suggest that the company’s revenue falsification exceeding 1 billion RMB could make it the first forced delisting case in 2025.
On January 5, Puli Pharmaceutical issued a notice regarding the suspension and resumption of its convertible bonds and suspension and resumption of conversion of shares. The company’s stock was suspended on January 6 and resumed on January 7, with the implementation of a delisting risk warning from the resumption date onwards. The stock abbreviation was changed to “*ST Puli”.
In another announcement released by Puli Pharmaceutical on the same day, it was revealed that the company is under investigation by the China Securities Regulatory Commission for suspected violations of information disclosure regulations. The company received a “Notice of Administrative Penalty Notification” from the CSRC on January 4, 2025. According to the notification, Puli Pharmaceutical’s annual reports for 2021 and 2022 were found to contain false information, with a total of 1.031 billion RMB in falsely reported operating income for the two years, false profits of 695 million RMB, accounting for 76.72% of the total annual profit disclosed during the same period.
Puli Pharmaceutical stated in the announcement: “The company may fall under the significant illegal forced delisting situation specified in the ‘Shenzhen Stock Exchange Growth Enterprise Board Listing Rules (2024 Revision)’ where the total profit disclosed by the company has been falsely reported for two consecutive years, the total amount of falsely reported profits exceeds 500 million RMB and exceeds 50% of the total annual profit disclosed in the previous two years.”
In response, a report from the mainland media “Titan Media APP” on January 6 indicated that it seems almost certain that Puli Pharmaceutical will face forced delisting. During the two years of falsifying performance growth, the company’s stock price and market value reached their highest levels since listing, only to see the rapidly accumulated structure collapse in an instant.
It is a stark reminder of the consequences of financial misconduct and the importance of transparency in corporate operations. As authorities continue to crack down on such violations, investors are urged to exercise caution and due diligence in their investment decisions. The case of Puli Pharmaceutical serves as a cautionary tale for companies engaging in fraudulent practices and highlights the need for stringent regulatory oversight to protect investors and maintain market integrity.