2024 first case! ST XinHai is forced to delist due to major violations.


The A-share listed company ST XinHai has been forcibly delisted due to years of financial fraud and violation of relevant regulations.

According to the Shenzhen Stock Exchange, the A-share listed company ST Xinhai, due to financial fraud over many years and violation of relevant regulations, was forcibly delisted. On the evening of March 18th, *ST Xinhai announced that it had received a decision from the Shenzhen Stock Exchange on the termination of the listing of Xinhai Yi Technologies Group Co., Ltd. stock, which will enter the delisting consolidation period starting from March 26, lasting for 15 trading days with the expected last trading day being April 17.

ST Xinhai is forced to delist due to major violations

During the delisting consolidation period, ST Xinhai’s stock will be traded on the risk warning board of the Shenzhen Stock Exchange, with no price fluctuation limit on the first trading day, and a 10% daily limit thereafter. After the end of the delisting consolidation period, the Shenzhen Stock Exchange will delist ST Xinhai, and the company’s shares will be transferred to the National Equities Exchange and Quotations for management, entering a special section for share transfer.

*ST Xinhai was required to delist because its annual reports from 2014 to 2019 contained false records, violating the relevant provisions of the stock listing rules. On the evening of February 5th, the company announced that the China Securities Regulatory Commission had made an administrative penalty decision against it, identifying the company’s involvement in false sales revenue and profits, which were caused by participating in a false self-circulating business in dedicated communications, leading to inflated financial data over many years.

According to the decision, ST Xinhai inflated sales revenue and profits by hundreds of millions of yuan from 2014 to the first half of 2019 through false self-circulating business in dedicated communications, with the profits inflated by tens of millions of yuan in 2019 alone. The China Securities Regulatory Commission ordered ST Xinhai to correct the errors and issued a warning and fines to the company and the relevant personnel involved.

Similar to *ST Xinhai, *ST Botian was also delisted due to financial fraud over many years. The China Securities Regulatory Commission stated that ST Botian inflated or deflated business revenue and profits through various means, resulting in false records in the annual reports for many years. The Ministry of Finance also issued an administrative penalty for the illegal actions of ST Botian. According to the administrative penalty decision of the Beijing Securities Regulatory Bureau, *ST Botian’s balance sheets for 2020 and 2021 had false records amounting to more than 500 million yuan, involving multiple illegal activities.

Delisting has become the norm in the A-share market, with the number of compulsory delistings reaching 43 in 2023, including trade-related delistings and major illegal delistings, etc. Analysts point out that the trend of normalized delistings in the A-share market will continue, further refining the market competition environment, which will provide support and protection for the comprehensive registration system reform.

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Delisting refers to the process where a publicly-traded company's stock is formally removed from the stock exchange.

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