Announcement on the Company and Related Responsible Persons Receiving Administrative Penalty Notice
Dinglong Culture Co., Ltd. (hereinafter referred to as "the Company" or "Dinglong Culture") and all members of the Board of Directors guarantee that the content of this information disclosure is true, accurate, and complete, with no false records, misleading statements, or significant omissions.
On April 26, 2024, the Company received the "Notice of Case Filing" (No. Zhen Jian Li An Zi 0062024006) issued by the China Securities Regulatory Commission (CSRC). Due to suspected violations of information disclosure laws and regulations, the CSRC decided to file a case against the Company. On July 30, 2024, the Company and related responsible persons received the "Administrative Penalty Notice" (Guangdong Zhen Jian Penalty Zi [2024] No. 15) issued by the Guangdong Regulatory Bureau of the CSRC. The relevant circumstances are announced as follows:
1. Specific Content of the Administrative Penalty Notice
Dinglong Culture Co., Ltd., Long Xueqin, Fang Shuping, Wang Xiaoping, Zhang Wenlong, Liu Jiang: The investigation into the case of Dinglong Culture Co., Ltd. suspected of violating information disclosure laws and regulations has been completed by our bureau, and we intend to impose administrative penalties on you. We hereby inform you of the illegal facts, reasons, and basis for the proposed administrative penalties, as well as your related rights.
It has been found that Dinglong Culture is suspected of violating information disclosure laws and regulations as follows: Xundian Jinlin Titanium Mine Co., Ltd. (hereinafter referred to as "Xundian Jinlin") is a subsidiary of Yunnan Zhongtai Technology Co., Ltd. (hereinafter referred to as "Zhongtai Technology"), which is a holding subsidiary of Dinglong Culture. In 2021, Xundian Jinlin inflated its titanium concentrate production by 23,120.55 tons and sold the inflated titanium concentrate through Yunnan Jiumai Trading Co., Ltd. and Kaiyuan Desheng Trading Co., Ltd. to Fumin Longteng Titanium Industry Co., Ltd. (hereinafter referred to as "Longteng Titanium") and Yunnan Copper (Group) Titanium Industry Co., Ltd. (hereinafter referred to as "Yun Copper Titanium"). The titanium concentrate involved in the above transactions was not actually produced, the goods were not actually delivered, and the sales contracts were not actually executed, resulting in related economic benefits not flowing into the enterprise, which does not comply with the revenue recognition requirements of "Enterprise Accounting Standard No. 14 - Revenue." Dinglong Culture included the inflated inventory, operating income, and profits in the consolidated financial statements, leading to false records in the disclosed 2021 annual report and 2022 semi-annual report. Among them, the inflated inventory for 2021 was 9,580,821.56 yuan, and the inflated total profit was 2,147,160.01 yuan, accounting for 16.30% of the total profit disclosed for that period; in the first half of 2022, the inflated operating income was 45,778,689.00 yuan, and the inflated total profit was 37,903,539.96 yuan, accounting for 19.72% and 64.10% of the absolute values of the operating income and total profit disclosed for that period, respectively. The above illegal facts are supported by evidence including listed company announcements, accounting vouchers, original vouchers, explanatory statements, and inquiry records.