Chinese Stock Exchange Delists *ST Lifang Over ¥500M Revenue Fraud

On February 14, 2026, the Shenzhen Stock Exchange (Shenzhen Zhengquanjiaoyisuo 深圳证券交易所) issued a formal delisting notice to *ST Lifang (Lifang 立方), marking another high-profile enforcement action against financial fraud in China’s capital markets.

This isn’t just another regulatory slap on the wrist.

We’re talking about one of the most serious violations of China’s securities laws—and the consequences are severe.

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What Exactly Did *ST Lifang Do Wrong?

The short answer: massive accounting fraud spanning multiple years.

According to the Shenzhen Stock Exchange’s official notice, *ST Lifang’s annual reports from 2021 through 2023 contained false records in their financial disclosures.

Here’s where it gets serious:

• The company falsely recorded operating revenue totaling more than ¥500 million RMB ($69.5 million USD) across 2021 and 2022 alone
• This fraudulent figure represented more than 50% of the total disclosed annual operating revenue for those two years
• The violations triggered mandatory delisting criteria under Shenzhen Stock Exchange rules

To put this in perspective: if your annual revenue disclosure is more than half fake, you’ve crossed the line from “accounting error” into deliberate financial fraud.

China’s regulators don’t mess around with this stuff anymore.

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The Timeline: When Trading Gets Suspended

The delisting process doesn’t happen overnight.

Here’s how the sequence plays out:

• February 24, 2026: Trading of *ST Lifang shares is suspended immediately following the Prior Notice of Intent
• After the formal delisting decision: A “Delisting Consolidation Period” begins on the next trading day following five trading days from the announcement
• Duration: This consolidation period lasts exactly 15 trading days
• Final delisting: Shares are officially removed from the exchange on the trading day immediately following the consolidation period

This isn’t a quick execution—it’s a structured wind-down designed to give shareholders time to react and exit their positions.

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What Happens During the Delisting Consolidation Period?

The delisting consolidation period is basically a grace period for shareholders to sell their holdings before they become untradeable.

Here’s what changes:

• The security code remains unchanged, but the stock abbreviation gets modified to include a delisting status suffix
• Shares move to the “Risk Warning Board” (a separate trading segment for distressed securities)
• Trading continues for 15 trading days straight, with minimal disruption
• Under special circumstances, the exchange can suspend trading—but total accumulated suspension time cannot exceed 5 trading days
• After the 15-day window closes, the stock is permanently delisted and no longer tradeable on the exchange

For investors holding *ST Lifang shares, this means you have roughly three weeks to decide whether to cut your losses and sell, or hold worthless paper.

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Why This Matters for Chinese Market Credibility

*ST Lifang’s delisting is part of a broader shift in how China’s securities regulators are enforcing compliance.

A few years ago, companies could stretch the truth and face minor fines.

Today? Financial fraud results in delisting.

For investors and founders:

• The Shenzhen Stock Exchange is getting increasingly aggressive about enforcement
• Falsifying revenue by 50% is now a guaranteed path to delisting—no gray area
• If you’re considering going public in China, accounting accuracy is non-negotiable
• For shareholders in Chinese stocks, this reinforces the importance of due diligence and verification beyond what companies report

The regulator’s message is clear: play by the rules or get removed from the game entirely.

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The Bigger Picture: Regulatory Evolution

China’s approach to securities violations has evolved significantly.

What’s happening with *ST Lifang reflects a broader trend:

• Zero tolerance for material misstatements in financial disclosures
• Automatic delisting triggers based on quantifiable thresholds (like the 50% revenue fraud rule)
• Transparent processes with defined consolidation periods instead of surprise delistings
• Focus on protecting public market participants from fraudulent companies

This is actually healthy for long-term market development—even if it sucks for current shareholders.

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References

• SZSE Issues Delisting Notice to *ST Lifang Due to Revenue Discrepancies – Jiemian News
• Listed Company Disclosure Search – Shenzhen Stock Exchange
• Administrative Penalties and Enforcement Actions – China Securities Regulatory Commission