The mainland Dongxu Group has been exposed for financial fraud, with a ten-year overstatement of revenue by 64.5 billion yuan and falsification of 44.7 billion yuan in deposits, deceiving the entire capital market. It was delisted and delisted in October 2024, leading to more than 160,000 shareholders becoming the butt of the joke with their “patriotic investments.” Dongxu Group’s controlling shareholder Li Zhaoting, once the richest man in Hebei, is now under investigation by the mainland’s Securities Regulatory Commission.
Li Zhaoting, born in Xingle, Hebei in July 1965, graduated from university in 1986 and worked at Shijiazhuang Diesel Engine Factory for nearly 11 years, holding positions such as technician, workshop director, assistant general manager, and deputy general manager. In 1996, he became a director of Hebei Dongxu Investment Group Co., Ltd. Li Zhaoting resigned and ventured into the electronic shell equipment manufacturing business, founding the Dongxu Group. In 2010, Dongxu Group successfully reorganized and acquired a controlling stake in the large state-owned enterprise Shijiazhuang Baoshi Group, with Li Zhaoting serving as chairman of Baoshi Group.
In 2017, Li Zhaoting entered the new energy vehicle industry and realized industrial applications of graphene-based lithium-ion batteries, graphene LED lights, graphene heating films, and more. In 2019, Li Zhaoting became the richest man in Shijiazhuang with a wealth of 23.5 billion yuan, ranking 140th on the Hurun Rich List the same year. In 2020, Dongxu Group’s market value exceeded 200 billion yuan.
Li Zhaoting has always advocated “industry for the country.” Dongxu Group proclaimed at its inception the goal of “breaking foreign monopolies, becoming a company that safeguards the national strategic industrial security, and promoting the revitalization of national industries,” thus being hailed as a patriotic enterprise.
However, this enterprise, which touted “industry for the country” and labeled itself a “patriotic enterprise,” shamelessly engaged in massive fraud while its internal workings had long been “rotten to the core,” constantly scheming to “harvest” investors.
It was found that from 2015 to 2019, Dongxu Group overstated its performance by falsely reporting 47.825 billion yuan in revenue, inflating profits by 13.001 billion yuan, and falsely increasing deposits by 44.79 billion yuan; Dongxu Optoelectronics overstated its revenue by 16.76 billion yuan and inflated profits by 5.627 billion yuan.
To facilitate the fraud, Li Zhaoting established 55 related companies, which operated consistently within the business segments of two listed companies, engaging in cash-out schemes totaling up to 16.9 billion yuan through internal transactions.
By falsely luring in more than 160,000 investors, Dongxu’s top management also cashed out 8.9 billion yuan through equity pledges. In addition to the previous financial fraud incidents, 19 key individuals in Dongxu Group have been banned from entering the securities market for at least five years, and Li Zhaoting was fined 589 million yuan.
On September 20, 2024, due to its parent company’s non-operating use of 9.595 billion yuan of ST Xudian’s funds, the Shenzhen Stock Exchange decided to delist ST Xudian’s A and B shares. On March 16, 2025, Li Zhaoting was investigated for suspected information disclosure violations.
Financial fraud is not uncommon in the CCP, utilizing hidden related parties, “shell companies,” and third parties to construct transactions without economic substance, concealing illegal purposes under legal forms. In 2024 alone, the CCP’s Securities Regulatory Commission imposed administrative penalties on 61 cases of financial fraud, a 17% increase year-on-year.
Sun Guoxiang, associate professor of International Affairs and Business Department at Nanhua University in Taiwan, told Epoch Times that “massive financial fraud could cause turmoil in the capital market, trigger systemic risks in the financial markets, and even lead to significant fluctuations in the country, causing stock market panics.”