According to the Zhitong Finance App, Zhongbai Group (000759.SZ) issued an announcement. On December 20, 2023, the company received Decision on Administrative Supervision Measures from the Hubei Regulatory Bureau (“Hubei Securities Regulatory Bureau”) of the China Securities Regulatory Commission (“Hubei Securities Regulatory Bureau”) No. 65 “Decision of the Hubei Securities Regulatory Bureau on Issuing Warning Letter Measures against Zhongbai Holding Group Co., Ltd., Wang Meifang, Zhang Jun, Hu Jian, and Li Huibin”. The details are as follows:

According to the announcement of Zhongbai Holding Group Co., Ltd. (hereinafter referred to as Zhongbai Group or Company) on December 20, 2023, Zhongbai Storage and Supermarkets Co., Ltd., a wholly-owned subsidiary of the company, discovered on July 22, 2023, that financial officer Shao was suspected of embezzling the company's funds by his position and immediately reported the case to the public security authorities. On October 13, 2023, the public security authorities arrested all of the relevant criminal suspects. The case is currently under investigation. Preliminary estimates suggest that the total amount of funds embezzled is about 219 million yuan. It is estimated that this will lead to an increase of about 219 million yuan in the original value of the company's other receivables, an increase of about 219 million yuan in accounts payable, an increase of about 219 million yuan in accounts payable, a preliminary estimate of other receivables and bad debt preparations of about 210 million yuan, a reduction in total profit of about 50 million yuan in 2023, and a reduction of the total profit of the previous year by about 160 million yuan.

The estimated losses have reached the major incident standards stipulated in Article 22 (2) (1) of the “Administrative Measures on Information Disclosure of Listed Companies” (Order No. 182) and Article 80 (2) (5) of the “Securities Law” (2019 Revision). The company should disclose it immediately, but it was not until December 20, 2023 that the company issued the “Notice Concerning the Suspected Embezzlement of Funds by Employees of Subsidiaries”. The information was not disclosed in a timely manner.

The above actions of the company violate the provisions of Article 3 (1) and Article 22 (1) of the “Administrative Measures on Information Disclosure of Listed Companies” (Order No. 182). Wang Meifang, as the company's chairman, Zhang Jun as the company's general manager, Hu Jian as the company's deputy general manager and head of accounting, and Li Huibin, as the company's board secretary, failed to fulfill their obligation of diligence and diligence in accordance with section 4, section 51 (2) and (3) of the “Administrative Measures on Information Disclosure of Listed Companies” (Securities Regulatory Commission Order No. 182), and is mainly responsible for the company's irregularities.

According to section 52 (3) of the “Administrative Measures on Information Disclosure of Listed Companies” (CSRC Order No. 182), the Hubei Securities Regulatory Bureau decided to take administrative supervision measures to issue warning letters against Zhongbai Holding Group Co., Ltd., Wang Meifang, Zhang Jun, Hu Jian, and Li Huibin, and recorded them in the securities and futures market integrity file.