*ST Mubon and Its Actual Controllers Receive Administrative Penalties for Financial Fraud and Undisclosed Related-Party Transactions

On the evening of March 20, *ST Muboang (603398) announced that the company and relevant parties, including the actual controller Liao Zhiyuan, received the “Administrative Penalty Decision” issued by the Jiangxi Securities Regulatory Bureau on March 20. The penalties were due to violations such as false disclosures in periodic reports and failure to disclose related-party transactions as required. The company and responsible individuals were fined, and Liao Zhiyuan and Zhang Zhong’an were also banned from securities market activities for six years.

It is reported that *ST Muboang and Liao Zhiyuan had previously been under investigation by the China Securities Regulatory Commission (CSRC). In July 2025, the company was investigated for suspected false disclosures of financial data in annual and periodic reports; in September of the same year, the actual controller Liao Zhiyuan was investigated for suspected failure to disclose non-operating fund transactions as required. In February 2026, the company and involved parties received a preliminary notice of administrative penalties, and the formal penalty decision clarified the illegal facts.

According to the Jiangxi Securities Regulatory Bureau, *ST Muboang was found to have two major violations. First, false disclosures in periodic reports and non-public issuance documents. In 2023 and the first half of 2024, the company’s subsidiaries Inner Mongolia Hao’an and subsidiary Jierui Electromechanical fabricated sales of silicon materials and single-crystal furnace businesses, artificially inflating revenue by a total of 713.7 million yuan—5.155 billion yuan in 2023 (31.17% of reported revenue) and 198 million yuan in the first half of 2024 (45.49% of reported revenue). During the same period, costs were inflated by 479.59 million yuan, and total profit was inflated by 234 million yuan, with the inflated profit accounting for 536.60% and 46.50% of the reported profit for 2023 and the first half of 2024, respectively. These false disclosures led to inaccuracies in the 2023 annual report and the 2024 semi-annual report. Additionally, the private placement prospectus disclosed in December 2023 and the listing announcement in February 2024, which contained false financial data, also constituted false disclosures.

Second, failure to disclose related-party transactions as required. In 2024, the company’s non-operating fund transactions with the actual controller Liao Zhiyuan and related party Zhang Zhong’an totaled 1.204 billion yuan, accounting for 128.98% of the audited net assets at the time, constituting related-party non-operating fund occupation. Liao Zhiyuan’s occupation amounted to 168 million yuan, with a year-end balance of 107 million yuan; Zhang Zhong’an’s occupation was 1.036 billion yuan, with a year-end balance of 45 million yuan. These fund occupations were not disclosed in interim reports or the 2024 annual report, resulting in significant omissions. As of the end of November 2025, all principal and interest of the funds occupied by Liao Zhiyuan and Zhang Zhong’an had been repaid.

In this penalty, responsible entities were held accountable according to law. The Jiangxi Securities Regulatory Bureau identified Liao Zhiyuan, Zhang Zhong’an, and Tang Xiaochun as directly responsible managers, with Zhang Zhonghua and Huang Meiliang as other responsible personnel. Liao Zhiyuan, as the actual controller, also organized and directed the illegal activities. Based on the facts and nature of the violations, the bureau decided to order *ST Muboang to correct the violations and issued a warning, along with a fine of 7 million yuan; Liao Zhiyuan received a warning and an 8 million yuan fine; Zhang Zhong’an and Tang Xiaochun were fined 3.5 million yuan and 2 million yuan, respectively; Zhang Zhonghua and Huang Meiliang each received a 1 million yuan fine. Due to the severity of the violations, Liao Zhiyuan and Zhang Zhong’an were also banned from securities market activities for six years, during which they are prohibited from engaging in securities-related business or serving as directors, supervisors, or senior management of securities issuers.