Due to fund occupation and disclosure violations, Hongdou Co., Ltd. and the relevant responsible persons were ordered by the Jiangsu Securities Regulatory Bureau to make corrections and issued a warning letter.

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On April 3, Jiangsu Hongdou Industrial Co., Ltd. (Hongdou Shares, 600400.SH) released an announcement, disclosing that the company and relevant responsible persons received two administrative regulatory decision documents issued by the Jiangsu Office of the China Securities Regulatory Commission (hereinafter referred to as “Jiangsu CSRC”), concerning the company and relevant responsible persons. Due to issues involving the occupation of operating funds, the occupation of non-operating funds, and inaccurate and untimely information disclosure, the regulatory measures taken against the company and relevant responsible persons include being ordered to make corrections and being issued warning letters, respectively.

According to the announcement, on April 3, 2026, Hongdou Shares received from the Jiangsu CSRC the “Decision of the Jiangsu CSRC on Taking Ordered-Correction Measures Against Jiangsu Hongdou Industrial Co., Ltd. and Hongdou Group Co., Ltd.” (〔2026〕No. 33, hereinafter referred to as “Document 1”), as well as the “Decision of the Jiangsu CSRC on Taking Measures of Issuing Warning Letters Against Jiangsu Hongdou Industrial Co., Ltd., Hongdou Group Co., Ltd., and Meng Xiaoping” (〔2026〕No. 34, hereinafter referred to as “Document 2”).

In accordance with the contents of Document 1, as of December 31, 2024, Hongdou Shares’ accounts receivable from Hongdou Group Co., Ltd. (hereinafter referred to as Hongdou Group) totaling 110 million yuan had become overdue. All the related overdue accounts receivable were fully collected before April 30, 2025. However, in 2025, Hongdou Shares’ accounts receivable from Hongdou Group again became overdue. As of September 30, 2025, the balance of accounts receivable from Hongdou Group that were overdue beyond the credit period was 45.0943 million yuan.

The Jiangsu CSRC pointed out that, in 2024, after Hongdou Shares’ accounts receivable from Hongdou Group had already become overdue, in 2025 it did not exercise strict control over related-party accounts receivable and did not timely pursue collection, which resulted in the accounts receivable becoming overdue again. This constitutes circumstances in which the controlling shareholder occupied funds of the listed company in its day-to-day business activities. The relevant actions of Hongdou Shares and Hongdou Group violated the provisions of Article 4 and Article 20 of the “Regulatory Guidelines No. 8 for Listed Companies—Regulation Requirements on Fund Occupation and External Guarantees of Listed Companies” (CSRC Announcement 〔2022〕No. 26). Pursuant to the provisions of Article 170, Paragraph 2 of the Securities Law and Article 23 of the “Regulatory Guidelines No. 8 for Listed Companies—Regulation Requirements on Fund Occupation and External Guarantees of Listed Companies” (CSRC Announcement 〔2022〕No. 26), it decided to take administrative regulatory measures ordering corrections against Hongdou Shares and Hongdou Group.

Document 2 also identified two other violations. Among them, on November 12, 2024, Hongdou Group conducted two stock pledge transactions at the branch of Pudong Development Bank in Wuxi. Hongdou Group failed to promptly inform Hongdou Shares of the above stock pledge matters, resulting in the relevant equity pledge information disclosure being inaccurate in the announcement disclosed by Hongdou Shares on January 23, 2025 titled “Announcement on the Release of Part of the Share Pledges by the Controlling Shareholder and the Re-Pledge.” Hongdou Group failed to promptly provide written notice to Hongdou Shares of the relevant circumstances it came to know, violating the first paragraph of Article 3 of the “Administrative Measures for Information Disclosure of Listed Companies” (CSRC Order No. 182).

Another matter relates to May 2025. Through a prepayment method, Hongdou Group non-operationally occupied 12.5 million yuan of funds from Hongdou Shares. Meanwhile, Hongdou Shares failed to disclose this non-operational funds occupation in its “2025 Semi-Annual Report.” The relevant conduct of Hongdou Shares and Hongdou Group violated the first paragraph of Article 3, Article 15 of the “Administrative Measures for Information Disclosure of Listed Companies” (CSRC Order No. 226) and the provisions of Article 3 and Article 5 of the “Regulatory Guidelines No. 8 for Listed Companies—Regulation Requirements on Fund Occupation and External Guarantees of Listed Companies” (CSRC Announcement 〔2022〕No. 26), abbreviated as “Guidelines No. 8”). Meng Xiaoping, the secretary to the board of directors at the time, failed to fulfill her duty of diligence and conscientiousness, violating Article 4 of the “Administrative Measures for Information Disclosure of Listed Companies” (CSRC Order No. 226).

The Jiangsu CSRC stated that, pursuant to the provisions of Article 52 of the “Administrative Measures for Information Disclosure of Listed Companies” (CSRC Order No. 182) and Article 53 of the “Administrative Measures for Information Disclosure of Listed Companies” (CSRC Order No. 226), our office decided to take administrative regulatory measures of issuing warning letters against Hongdou Shares, Hongdou Group, and Meng Xiaoping.

In response to the above regulatory measures, Hongdou Shares stated in its announcement that the company and the relevant responsible persons attach great importance to the issues involved in the above decisions, and will strictly and diligently summarize and rectify the matters in accordance with relevant laws and regulations and the requirements of the Jiangsu CSRC. The company and the relevant responsible persons will strengthen their study of relevant laws and regulations and regulatory documents, improve the level of standardized operation, strengthen information disclosure management, strictly comply with relevant provisions, and timely fulfill information disclosure obligations, in order to effectively safeguard the interests of the company and all its shareholders.

The principal business of Hongdou Shares is the production and sales of men’s apparel. Its men’s apparel products include shirts, suits, trousers, jackets, T-shirts, knitwear, and more. According to the 2025 annual performance forecast disclosed by Hongdou Shares, it expects that its net loss attributable to shareholders of the listed company for 2025 will be between 280 million yuan and 360 million yuan; it expects that its net loss attributable to shareholders of the listed company after deducting non-recurring profit and loss for 2025 will be between 310 million yuan and 390 million yuan.

According to Datayes VIP, as of the close on April 3, Hongdou Shares was trading at 2.06 yuan per share, down 2.83%.

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