Delisting Does Not Mean Exemption from Liability! Yangtze River Health Receives Fine, Multiple Executives Permanently Banned from Securities Market

(Source: Caixin)

Behind strict law enforcement is the continuous improvement of investor protection mechanisms.

Recently, Changjiang Runfa Health Industry Co., Ltd. (Stock Code: 400240, Stock Abbreviation: R ChangKang1, formerly A-shares code 002435), which was delisted from the main board, issued an announcement that the company, its controlling shareholder, and related parties received an “Administrative Penalty Decision” issued by the Jiangsu Regulatory Bureau of the China Securities Regulatory Commission.

The announcement states that due to failure to disclose related-party non-operating capital occupation in a timely manner, significant omissions in periodic reports, and failure to disclose major guarantee matters promptly, among other reasons, based on the facts, nature, circumstances, and social harm of the violations, the Jiangsu Regulatory Bureau imposed penalties on the responsible parties, including: 1. Changjiang Runfa Health Industry Co., Ltd.: a warning and a fine of 10.5 million yuan. 2. Changjiang Runfa Group Co., Ltd. (controlling shareholder): a warning and a fine of 15 million yuan. 3. The then core executives (former Chairman Yu Xiaqiu, Chairman Huang Zhonghe, former President Lu Yifeng, Director and Vice President Li Yiqing, Vice President and CFO Zhang Yi): warnings and fines respectively, with Yu Xiaqiu fined 12 million yuan, and other executives fined amounts ranging from several million yuan; the total personal fines exceeded 27.8 million yuan. Additionally, Yu Xiaqiu and Huang Zhonghe are permanently banned from securities markets, and Zhang Yi is banned for three years.

According to the above penalties, many of the sanctions in this case reached the maximum limit, indicating serious violations that have touched the bottom line of laws and regulations, and will not be avoided due to the company’s delisting. In recent years, securities regulatory authorities have continuously strengthened the “criminal-penal linkage” mechanism with judicial agencies, targeting the actual controllers, intermediary agencies, and key personnel behind delisted companies for precise strikes and severe punishments, aiming to address issues of individuals using delisting as an opportunity to evade legal responsibilities.

Behind strict law enforcement is the continuous improvement of investor protection mechanisms.

Rights protection and claims collection officially begin:

According to the Securities Law and the “Provisions of the Supreme People’s Court on Several Issues Concerning the Trial of Civil Compensation Cases Arising from False Statements in the Securities Market,” listed companies that cause investor rights to be damaged due to false statements should bear civil compensation responsibilities.

Platform rights protection lawyers state that the rights protection collection period for Changjiang Health 002435 is:

Investors who buy stocks between January 13, 2021, and before the close of trading on April 29, 2024, and still hold the stocks at the close of April 29, 2024, are eligible to register for rights protection and claims.

Required fee: Full-risk legal agency, no fees charged to investors before compensation is received.

Required materials: During registration, only basic information needs to be provided. After approval, you will receive a text message guiding you to connect with a lawyer. Please prepare the materials according to the lawyer’s instructions and mail them to the law firm’s address.

Materials include account statements, account proof, power of attorney, etc. These can be prepared in half a day, and subsequent matters will be handled by the lawyer, so you do not need to appear in person.

Rights protection and claims registration link: Click to register

For questions related to rights protection, see the rights protection guide: Click to view

Investors can search for “Rights Protection Platform” in the Tonghuashun APP to find the registration portal and participate in claims.

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