Guizhou Bai Ling Pharmaceutical Co., Ltd. (Guizhou Bai Ling), a subsidiary of Bai Ling Enterprise Group, announced on December 20th that the company and relevant personnel were penalized due to a profit overstatement of 655 million yuan over the span of 3 years. Additionally, several other listed companies were also penalized for financial irregularities. Legal experts mentioned that the severe penalties imposed on Guizhou Bai Ling indicate the seriousness of its violations.
The term “severe penalty” refers to a form of strict punishment within the statutory penalty range that administrative authorities apply the upper limit standard.
In the announcement released on the 20th, Guizhou Bai Ling stated, “On December 19, the company and relevant parties received a ‘Notice of Advance Administrative Penalty’ issued by the Guizhou Securities Regulatory Bureau of the China Securities Regulatory Commission.”
The announcement revealed that from 2019 to 2021 and in 2023, Guizhou Bai Ling had falsified its financial reports, with a cumulative overstated profit of 655 million yuan from 2019 to 2021 and an understated profit of 459 million yuan in 2023.
According to the announcement, Guizhou Bai Ling was fined 10 million yuan, and the Chairman, Jiang Wei, received a warning and a fine of 5 million yuan. Additionally, a 10-year ban from the securities market was imposed. Individuals involved in senior management at Guizhou Bai Ling were also fined between 3.5 million yuan to 700,000 yuan.
A certified public accountant in Beijing highlighted that understating sales expenses to manipulate profits is a common method of financial fraud. While this tactic may temporarily mask financial statements, it ultimately poses legal, financial, and reputational risks to the company.
Lawyer Xu Yuehui from Guangdong Huanyu Jingmao Law Firm emphasized that according to the Securities Law, entities that submit reports with false information can face a warning and fines ranging from 1 million to 10 million yuan. Given Guizhou Bai Ling’s maximum penalty, it reflects the gravity of the violations.
Xu Yuehui added that based on the illegal facts uncovered by the Guizhou Regulatory Bureau, investors who bought Guizhou Bai Ling stock between April 30, 2020, and November 8, 2024, and sold or held the stock after November 9, 2024, may be eligible for compensation subject to judicial approval.
In another announcement on the same day, Guizhou Bai Ling stated that its stock would be placed under additional risk warnings, changing its stock abbreviation from “Guizhou Bai Ling” to “ST Bai Ling” starting December 23, 2025.
Apart from Guizhou Bai Ling, ST Yuanchi (Yuan Da Intelligent), Funeng Dongfang, and 81 Steel, three other listed companies, disclosed receiving administrative penalty decisions or advance notices involving company and responsible personnel.
Yuan Da Intelligent was penalized for overstating operating income by approximately 123 million yuan, 66.23 million yuan, and 138 million yuan from 2019 to 2021, resulting in a fine of 6 million yuan, with the former Chairman Kang Baohua being fined 3 million yuan. Funeng Dongfang was fined 6.5 million yuan for false financial issues. 81 Steel faced penalties for significant omissions in its annual reports related to non-operational capital transactions with its controlling shareholder, 81 Steel Group, from 2022 to 2024. The main responsible persons were fined between 1.5 million and 2 million yuan.
Public records show that Guizhou Bai Ling Pharmaceutical Co., Ltd. was established on March 25, 1999, and is a pharmaceutical listed company specializing in Miao medicine research, production, and sales. In 2010, the company went public on the Shenzhen Stock Exchange, earning the title of “China’s First Miao Medicine Stock.”
As of December 19th, Guizhou Bai Ling’s stock price was 5.63 yuan, rising by 1.81%, with a market value of 7.868 billion yuan.