Guizhou Bailing Vice General Manager Jiang Yong was warned and fined 2 million yuan for information disclosure violations and irregularities

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The Guizhou Regulatory Bureau of the China Securities Regulatory Commission (hereinafter referred to as “Guizhou Regulatory Bureau”) announced an administrative penalty decision on March 27, 2026. Guizhou Bailing Enterprise Group Pharmaceutical Co., Ltd. (hereinafter referred to as “Guizhou Bailing”)'s then-director and deputy general manager Jiang Yong was fined 2 million yuan and given a warning for failing to diligently perform his duties in the company’s information disclosure violations.

Violation Facts: Continuous Years of Financial Data Distortion and Irregular Sales Expense Accounting

The Guizhou Regulatory Bureau found that Guizhou Bailing, during 2019 to 2021 and in 2023, failed to strictly implement the provisions of Article 9 of the “Basic Standards for Enterprise Accounting” and did not use the accrual basis for accounting, nor did it allocate sales expenses according to the matching principle of income and costs, resulting in serious distortion of the company’s financial data.

Specific manifestations include:

• In 2019, underreported sales expenses by 350.12M yuan, and correspondingly overstated profits by 350.12M yuan, accounting for 95.73% of the total reported profit (absolute value);
• In 2020, underreported sales expenses by 240.81M yuan, and overstated profits by the same amount, accounting for 115.35% of the total reported profit (absolute value);
• In 2021, underreported sales expenses by 63.79M yuan, and overstated profits by the same amount, accounting for 45.04% of the total reported profit (absolute value);
• In 2023, overstated sales expenses by 459.41M yuan, and understated profits by the same amount, accounting for 93.17% of the total reported profit (absolute value).

These financial falsifications directly led to false disclosures in Guizhou Bailing’s 2019, 2020, 2021, and 2023 annual reports, violating the provisions of Article 78, Paragraph 2 of the Securities Law, constituting the illegal circumstances described in Article 197, Paragraph 2 of the Securities Law.

Jiang Yong’s Responsibility: Managed Sales and Signed Annual Reports, Failed to Diligently Perform Duties

The Guizhou Regulatory Bureau pointed out that, according to Article 82, Paragraph 3 of the Securities Law, directors, supervisors, and senior management of issuers shall ensure that the disclosed information is true, accurate, and complete. Jiang Yong, then-director and deputy general manager of Guizhou Bailing, managed the sales department, knew about issues in sales expense accounting but did not take effective measures to stop the company’s financial fraud, and signed Guizhou Bailing’s 2019, 2020, 2021, and 2023 annual reports, ensuring these reports were true, accurate, and complete. Therefore, Jiang Yong is identified as another direct responsible person for Guizhou Bailing’s information disclosure violations.

Hearing Defense and Regulatory Review: Reasons Such as Boundary of Responsibilities Not Accepted

During the investigation, Jiang Yong and his agent submitted statements and requested a hearing. Their main defenses included: first, clear boundary of responsibilities, with no management or review authority over sales expense accounting; second, he had fully fulfilled his diligent duties as director and senior manager, and during his management of the sales department, he exercised reasonable caution, and signing the annual reports as director met legal standards, with no subjective fault, and should not be penalized by law. They requested the revocation of all proposed penalties against him.

Upon review, the Guizhou Regulatory Bureau held that:

First, Jiang Yong, as a director and deputy general manager of the company, and the younger brother of the then-chairman Jiang Wei, managed sales for a long time and was aware of issues in sales expense accounting. His signature on the relevant annual reports means he guaranteed the truth, accuracy, and completeness of the reports. The claim that he had “no management or review responsibility over sales expense accounting” is not a legal reason to exempt from administrative penalties.

Second, the existing evidence is insufficient to prove Jiang Yong diligently performed his duties. Considering the nature, circumstances, social harm, and subjective fault of his violations, appropriate penalties are justified, and the penalty amount is reasonable.

Therefore, the Guizhou Regulatory Bureau did not accept Jiang Yong’s defense.

Decision: Warning and Fine of 2 Million Yuan

According to Article 197, Paragraph 2 of the Securities Law, the Guizhou Regulatory Bureau decided: to give Jiang Yong a warning and impose a fine of 2 million yuan.

Jiang Yong shall, within 15 days of receiving this penalty decision, pay the fine directly to the state treasury and send a copy of the payment voucher bearing his name to the Guizhou Regulatory Bureau for record. If dissatisfied, he may apply for administrative reconsideration to the China Securities Regulatory Commission within 60 days of receiving the decision, or file an administrative lawsuit directly with the competent people’s court within 6 months. During reconsideration and litigation, the penalty decision shall not be suspended.

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