Key Points
- Regulatory finding: The CSRC (证监会) concluded that Yuan Cheng (Yuánchéng Huánjìng 元成环境 / *ST元成) repeatedly overstated revenue and profits for three consecutive years.
- Proposed penalties: The company faces a fine of ¥37,454,600 RMB; five responsible individuals face ¥42,000,000 RMB in total fines; the actual controller faces a 10-year market ban, and potential criminal clues will be transferred to public security.
- Delisting triggered: The Shanghai Stock Exchange (SSE 上海证券交易所) will initiate delisting procedures for stock code 603388 because the conduct meets the threshold for major illegal conduct under listing rules.
- Investor implications: Significant downside risk and reduced liquidity; no automatic compensation—investors should monitor official CSRC, SSE, and Yuan Cheng (元成环境) filings and consider legal or portfolio actions.
Yuan Cheng (Yuánchéng Huánjìng 元成环境) financial fraud is the focus of a major enforcement action announced on 2025.10.10 by the China Securities Regulatory Commission (CSRC 证监会).
The CSRC has issued a prior administrative-penalty notice related to serious, repeated falsification of financial data by Yuan Cheng Environment Co., Ltd. (Yuancheng Huanjing, Yuánchéng Huánjìng 元成环境股份有限公司; shown as *ST元成; Shanghai stock code: 603388).
The Shanghai Stock Exchange (SSE, Shànghǎi Zhèngquàn Jiāoyìsuǒ 上海证券交易所) will begin delisting procedures because the case meets the threshold for major illegal conduct under listing rules.
Below is a clear breakdown of what happened, what regulators propose, and what investors and market participants should watch next.
Quick Snapshot — What happened
Regulator: China Securities Regulatory Commission (CSRC 证监会).
Company: Yuan Cheng Environment (Yuánchéng Huánjìng 元成环境股份有限公司; shown as *ST元成).
Stock code: 603388 on the Shanghai Stock Exchange (SSE 上海证券交易所).
Main issue: Repeated overstating of revenue and profits across periodic reports for three consecutive years.
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Key actions proposed by the CSRC
- Fine against the listed company: ¥37,454,600 RMB ($5,203,694 USD).
- Fines against five responsible individuals (total): ¥42,000,000 RMB ($5,833,333 USD).
- Market ban for the actual controller: 10-year ban from participating in the securities market.
- Delisting initiation: The Shanghai Stock Exchange will start delisting procedures because the conduct triggers mandatory delisting rules.
- Criminal clues: Potential criminal clues will be transferred to public security authorities in accordance with law.
All USD conversions above are approximate, shown for reader convenience. (Conversions in this article use an approximate rate of ¥7.20 RMB = $1 USD; amounts are rounded to whole dollars.)
What the CSRC found
The CSRC’s investigation concluded that Yuan Cheng repeatedly inflated revenue and profit figures across its periodic reports for three consecutive years.
The falsifications constitute violations of securities laws and accounting standards that require truthful and accurate disclosure.
Based on the established facts, the CSRC issued a statutory prior notice of administrative punishment and proposed the measures above.
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Regulatory and legal follow-up
The CSRC said it will follow the principle of “transfer all that should be transferred” (应移尽移) when criminal evidence exists.
Any transfer will be handled strictly according to the Criminal Law and prosecutorial filing standards issued by the Supreme People’s Procuratorate and the Ministry of Public Security.
Because the confirmed facts meet the standard for major illegal conduct under listing rules, the Shanghai Stock Exchange will initiate delisting procedures.
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Implications for investors
- Significant downside risk: Delisting proceedings and severe penalties usually cause large declines in share value and reduce liquidity for shareholders.
- No automatic compensation: Delisting itself does not guarantee compensation for investor losses; civil claims or criminal restitution processes would be separate and depend on legal outcomes.
- Monitor filings closely: Investors should watch official updates from the CSRC, the Shanghai Stock Exchange, and Yuan Cheng Environment (元成环境) for administrative penalties, delisting progress, and criminal or civil actions.
- Operational risk: If criminal transfers proceed, subsequent investigations and prosecutions can affect a company’s ability to operate or to satisfy creditor and investor claims.
Practical next steps for investors, founders, and analysts
- Check exposure: Identify any direct or indirect position in *ST元成 and quantify potential loss scenarios.
- Track public notices: Prioritize official announcements from CSRC and SSE for legally binding information.
- Consider legal advice: Investors with significant exposure should evaluate options for civil recovery or participation in any restructuring processes that may follow.
- Review process criteria: Learn the delisting rules on the Shanghai Stock Exchange so you can anticipate timelines and likely next steps.
Broader context — why this matters
This enforcement action shines a light on the consequences of material financial misreporting for listed companies in China.
It emphasizes two clear signals to markets and founders:
- Regulatory enforcement can lead to swift and severe market consequences, including multi-million RMB fines and long-term market bans for controllers.
- Serious illegal conduct triggers mandatory delisting, which is a structural market discipline intended to protect investors and preserve market integrity.
For investors and market participants focused on Chinese tech and industrial names, this is a reminder to prioritize governance, transparency, and accounting diligence when evaluating public companies.
Company background (identification)
Company: Yuan Cheng Environment (Yuánchéng Huánjìng 元成环境股份有限公司; shown as *ST元成).
Stock exchange: Shanghai Stock Exchange (SSE 上海证券交易所).
Stock code: 603388.
Linking and reporting opportunities
- Link to the CSRC notice for regulatory text and official findings.
- Link to the Shanghai Stock Exchange site for delisting rule details and process timelines.
- Link to local financial reporting on the case for market reaction and trading suspension updates.
Bottom line
This is a material enforcement action with immediate consequences for *ST元成 shareholders and broader implications for market governance in China.
Stay updated through official CSRC and SSE channels, and evaluate your exposure and next steps with care—Yuan Cheng (Yuánchéng Huánjìng 元成环境) financial fraud.
