Guizhou Bailing's then-independent director Wang Yu received a warning letter; the company's four-year annual reports contained false records, with a cumulative impact on profits exceeding 1.1 billion yuan.

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On March 27, 2026, Guizhou Bailing Enterprise Group Pharmaceutical Co., Ltd. (hereinafter referred to as “Guizhou Bailing”)'s then independent director Wang Yu received the “Administrative Penalty Decision” issued by the Guizhou Regulatory Bureau of the China Securities Regulatory Commission (CSRC) ([2026] No. 1). Due to the company’s false recording of financial data from 2019 to 2023, Wang Yu, as the then independent director, signed the relevant annual reports without fulfilling his diligent duty, and was subject to administrative regulatory measures including a warning letter, which was recorded in the securities and futures market integrity archive.

Company’s Four-Year Annual Reports Contain False Records, Total Impact on Profit Exceeds 1.1 Billion Yuan

According to the administrative penalty decision, Guizhou Bailing violated the accounting basis of accrual accounting and the principles of matching revenue and expenses, resulting in false records in the 2019, 2020, 2021, and 2023 annual reports.

Specifically, in 2019, the company underreported sales expenses by 350.12M yuan and overreported profit by the same amount, accounting for 95.73% of the total profit recorded in that period’s report (absolute value); in 2020, underreported sales expenses by 240.81M yuan and overreported profit by the same amount, accounting for 115.35%; in 2021, underreported sales expenses by 63.79M yuan and overreported profit by the same amount, accounting for 45.04%; in 2023, overreported sales expenses by 459.41M yuan and underreported profit by the same amount, accounting for 93.17%.

Former Independent Director Did Not Fulfill Diligence, Issued Warning Letter and Recorded in Integrity Archive

The Guizhou Regulatory Bureau pointed out that Wang Yu, as the company’s then independent director, signed the 2020 and 2021 annual reports but did not fulfill his diligent duties, violating relevant provisions of the “Administrative Measures for Information Disclosure of Listed Companies,” and was responsible for the company’s above-mentioned illegal acts.

According to Articles 59 and 52 of the “Administrative Measures for Information Disclosure of Listed Companies,” the Guizhou Regulatory Bureau decided to impose a regulatory measure of issuing a warning letter to Wang Yu and record it in the securities and futures market integrity archive. Wang Yu must submit a written rectification report to the Guizhou Regulatory Bureau within 15 working days of receiving the decision.

Additionally, the decision explicitly states that if Wang Yu objects to this supervisory and administrative measure, he can apply for administrative reconsideration to the China Securities Regulatory Commission within 60 days of receiving the decision, or file a lawsuit with the competent people’s court within 6 months. During the reconsideration and litigation period, the above supervisory and administrative measures shall not be suspended.

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