Jinzhou Port, a long-established port enterprise under the State-owned Assets Supervision and Administration Commission of Liaoning Province, has recently plunged into a serious crisis. Two vice presidents were arrested by the local court for financial fraud issues. The company, founded in 1998, is now facing the grim prospect of delisting.
Jinzhou Port announced on the evening of July 4th that two vice presidents, Ning Hongpeng and Cao Cheng, have been arrested by the Intermediate People’s Court of Jinzhou.
According to regulatory authorities, Jinzhou Port has three major serious violations. Firstly, the company severely delayed the disclosure of its half-year report for 2024, which was not released until after the closing date on October 31, far beyond the statutory deadline of August 31.
More critically, the company engaged in large-scale financial fraud. From 2022 to the first quarter of 2024, Jinzhou Port inflated profits through false trade and deferred recognition of port operation fees. In 2022, they inflated profits by 36.1045 million yuan, accounting for 22.46% of the disclosed profit total for that period; in 2023, 68.0878 million yuan, accounting for a staggering 65.96%; and in the first quarter of 2024, 15.3775 million yuan, representing 62.05%.
Additionally, the company was involved in massive fund misappropriation and irregular guarantees. The company, controlled by the then Vice Chairman and General Manager, misappropriated funds from Jinzhou Port through false trade, with an outstanding amount of 2.098 billion yuan as of December 31, 2024. At the same time, the company provided guarantees to related parties amounting to 2.98 billion yuan.
In the face of such serious illegal activities, Jinzhou Port and its 11 executives were fined a total of 38.6 million yuan, with Jinzhou Port bearing a fine of 20 million yuan.
In recent years, cases of financial fraud by Chinese listed companies have been exposed one after another. As it has triggered major violations leading to delisting criteria, Jinzhou Port entered a delisting preparation period on June 30, with the expected final trading date set for July 18, 2025. This marks another listed company being forced to delist due to financial fraud.