Controversies

Systematic Financial Fraud Inflated Revenue by RMB 21.1 Billion; Actual Controller Banned for Life

From 2016 to 2019, Tongjitang used subsidiaries to fabricate sales and procurement transactions, inflate selling and administrative expenses, and forge bank receipts, among other methods, cumulatively inflating revenue by RMB 21.121 billion and profit by RMB 2.816 billion; there were also controlling shareholder fund occupation, irregular guarantees, and inaccurate disclosure of raised funds. The CSRC listed the case first among its 20 typical enforcement cases in 2022. The company was fined RMB 3 million; actual controllers Zhang Meihua and Li Qing, a married couple, were jointly fined RMB 5 million and banned from the market for life; CFO Wei Junqiao was fined RMB 1 million and banned for 10 years; the company was subsequently delisted.