Jiangsu Yabaite faces penalty for falsifying project

Jiangsu Yabaite Technology Co faces penalties for violations of China’s securities laws after authorities found that the company had fabricated an unspecified project in Pakistan to inflate revenue and profits and falsified documents in the process, China’s Ministry of Foreign Affairs (MOFA) confirmed on Monday.

The China Securities Regulatory Commission (CSRC) will soon announce the penalties, Geng Shuang, a spokesman for the MOFA, told a briefing.

The CSRC conducted an investigation in coordination with relevant Pakistani authorities and could not find any economic ties or capital exchanges with any company or individual in Pakistan, according to Geng.

Following the official confirmation of fabrication from the authorities, Jiangsu Yabaite’s shares on the A-Share market tumbled 4.73 percent on Tuesday to close at 8.25 yuan ($1.26).

On May 12, the CSRC announced on its website that it would impose a 600,000 yuan fine on Jiangsu Yabaite for violating China’s information disclosure regulations.

It also said it would bar relevant executives of the company from the domestic markets for three to five years, or for life in some cases.

The CSRC also said in the statement that, between 2015 and September 2016, the company, based in Yancheng, East China’s Jiangsu Province, had fabricated overseas projects and other trade deals to artificially add 580 million yuan to its revenue and 260 million yuan to its profit.

The CSRC hadn’t announced the final penalties as of press time on Tuesday.

Jiangsu Yabaite operates in the sectors of construction, finance, technology and services, according to the introduction on the company’s website.

The company reported a yearon-year 57.34 percent growth in net profit to 117 million yuan in the first half of 2017, said a report by eastmoney.com in August.

During a conference call with investors in May, a company representative denied any wrongdoing and said the company had disclosed the necessary information “on time and in full,” according to a recording posted on its website.