CSRC Takes Strong Action: Three Listed Companies Fined in One Night

Overnight, three listed companies were named in investigations by the CSRC or local securities regulators. Yahui Long and Tiansheng New Materials have been initiated for case filing, while ST Funeng received an administrative penalty decision.

Yahui Long’s investigation stems from a strategic cooperation framework agreement announced a month ago, which allegedly contained misleading statements. This agreement is closely linked to the “brain-machine interface” concept. Yahui Long described its partner Brain Machine Starlink as a company driven by artificial intelligence, “deeply cultivating both non-invasive and invasive dual technical paths,” and claimed to have developed products such as EEG acquisition analyzers.

Tiansheng New Materials was filed for suspected illegal disclosure of information, without announcing specific directions.

ST Funeng, which received an administrative penalty, is involved in accounting fraud by its former subsidiary Shenzhen Dayu Precision Engraving Technology Co., Ltd. (hereinafter “Dayu Precision”). In 2020, the subsidiary fabricated a nonexistent procurement transaction, leading to an artificial increase in profits of 35.79 million yuan for ST Funeng that year.

Notably, as Yahui Long and Tiansheng New Materials were filed, as of February 6, a total of 8 listed companies or their actual controllers have been investigated since 2026.

ST Funeng is the 11th company to receive an administrative penalty decision this year.

This indicates that from 2026 to now, less than 5 days on average pass between a company or its actual controller being investigated, and about 3 days on average between an administrative penalty being imposed.

These regulatory actions demonstrate that a new normal of comprehensive supervision—covering “pre-event, during-event, and post-event”—has been fully established with a “zero tolerance” tone.

Two companies filed overnight, involving brain-machine interfaces and more

Following the investigation of listed company BeQingSong on February 5 for suspected market manipulation, two more companies were investigated on the evening of February 6.

One is Tiansheng New Materials, filed for suspected illegal disclosure of information; the other is Yahui Long, investigated for suspected misleading statements.

Both are under investigation, but there are notable differences. Tiansheng New Materials announced its case filing independently, and the reason—“illegal disclosure of information”—is one of the most common reasons for CSRC investigations. Past cases show that issues behind such investigations can range from minor to severe, including financial fraud and violations by major shareholders misappropriating company funds.

In contrast, Yahui Long’s investigation is more unusual.

On one hand, the case was announced on the official CSRC website, highlighting its importance.

As of February 6, 2026, a total of 8 listed companies or their actual controllers have been investigated by the CSRC since 2026, with four of these cases announced directly by the CSRC. Besides Yahui Long, the other three are Rongbai Technology, Sunflower, and Tianpu Shares.

On the other hand, Yahui Long’s investigation stems from suspected misleading statements, similar to Sunflower’s investigation announced on January 14 and Rongbai Technology’s on January 18. Less than a month apart, three companies have been investigated for misleading statements, indicating that this has become a key focus of CSRC regulation.

Specifically, Yahui Long’s misleading statement originated from a strategic cooperation framework agreement signed on January 7, 2026. The agreement announced cooperation with Shenzhen Brain Machine Starlink Technology Co., Ltd. (hereinafter “Brain Machine Starlink”) in product development, market promotion, and equity investment. Yahui Long described its partner as a company driven by artificial intelligence, “deeply cultivating both non-invasive and invasive dual technical paths,” and claimed to have developed products such as EEG acquisition analyzers.

However, this description was significantly revised later that evening. Under regulatory pressure, Yahui Long issued a supplementary announcement, substantially modifying the previous wording. The supplement clarified that Brain Machine Starlink’s current research products’ technical route is actually only non-invasive, with no invasive technology layout, and its related products have not yet entered registration or application stages, with some still in early R&D or preclinical phases. Yahui Long also admitted that the partner was newly established, small in scale, and that the framework agreement lacked substantive cooperation content, so it would not significantly impact the company’s performance in the short term.

Now, with the investigation initiated, this earlier announcement by Yahui Long has again become a focus of attention.

Similarly, Rongbai Technology was investigated for suspected misleading statements due to a major contract disclosure on January 14; Sunflower was investigated because of recent market doubts about its restructuring plan disclosed on September 22, 2025, and the actual capacity and business model of the target company.

It is worth noting that the time from the relevant announcement to the investigation filing is short: Yahui Long took one month, Rongbai Technology only four days. Sunflower was questioned about its restructuring target disclosed over four months ago, and its investigation was also initiated shortly after the doubts arose.

Sources indicate that the CSRC usually has some clues or evidence before officially launching a case investigation. Due to varying difficulties in evidence collection for different issues, the interval from problem occurrence to investigation filing varies.

Objectively, the speed of CSRC initiating investigations has been increasing. Data from this year show an increase in the number of companies investigated. Based on the eight companies or their controllers investigated as of February 6, with an average of less than 5 days per case, the strictness of supervision is evident.

The reasons for investigations are diverse, mainly falling into four categories: first, companies like Yahui Long, Rongbai Technology, and Sunflower suspected of misleading statements; second, controlling shareholders like BeQingSong suspected of market manipulation; third, violations of information disclosure laws, including Tiansheng New Materials, Quanyin High-tech, Baoxin Technology, and their controllers; fourth, major omissions, exemplified by Tianpu Shares.

This series of actions clearly indicates that the “zero tolerance” regulatory stance in capital markets is being comprehensively upgraded and implemented. The granularity of supervision is continuously refined, with closer attention to specific issues like misleading statements and major omissions, while increasing efforts to combat market manipulation and other malicious behaviors.

ST Funeng receives administrative penalty decision

11th company this year

On the same day that Yahui Long and Tiansheng New Materials were investigated, listed company ST Funeng received an “Administrative Penalty Decision.”

The issue with ST Funeng stems from its former subsidiary Dayu Precision, which has been spun off. In June 2020, Dayu Precision colluded with Chongqing Zhongguang Electric Co., Ltd. (hereinafter “Chongqing Zhongguang Electric”) to fictitiously create a procurement transaction, transferring funds to Chongqing Zhongguang Electric. Chongqing Zhongguang Electric then returned the funds as “payment” to Dayu Precision’s suppliers, completing a money loop. Through this series of operations, Dayu Precision artificially recognized sales revenue and accounts receivable on its books.

This manipulation caused significant distortions in ST Funeng’s consolidated financial statements:

In 2020: an artificially inflated profit of about 35.79 million yuan. Notably, this inflated amount accounted for 120.18% of the disclosed profit for that period, implying that if the fraud were removed, ST Funeng’s actual performance might have been a loss.

In 2021: the company impaired the previously inflated accounts receivable, leading to a virtual reduction in profit of about 22.65 million yuan, accounting for 6.64% of that year’s profit.

As a result, ST Funeng was fined 6.5 million yuan and ordered to correct the issues with a warning.

It is worth noting that fines of tens of millions or even over a hundred million yuan are not uncommon in current CSRC penalties. The 6.5 million yuan fine for ST Funeng is relatively low, related to the fact that the amount involved in the fraud was not large, and the involved subsidiary has been spun off.

All shares of the involved subsidiary Dayu Precision held by ST Funeng were sold in the first quarter of 2024. Currently, ST Funeng’s main business is new energy battery automation equipment, with no connection to Dayu Precision.

The reason ST Funeng was “dusted” with a label (ST) is due to the accounting fraud at Dayu Precision, with the ST designation starting on December 23, 2025. According to the latest regulations, companies involved in major illegal activities like accounting fraud cannot have their ST status removed for less than one year.

It should be noted that ST Funeng’s profits are hovering near losses. It suffered losses exceeding 300 million yuan in 2021 and 2022; turned a profit in 2023, and maintained profitability in 2024. However, in the first three quarters of 2025, it again reported a loss of 20 million yuan, indicating renewed operational pressure.

Another point of concern is that ST Funeng is the 11th company to receive an administrative penalty decision since 2026. Other companies that received formal penalties this year include *ST Changyao, ST Erya, ST Huilun, Jushi Chemical, Langjin Technology, Jiangsu Sunshine, Tibet Everest, Baoxin New Energy, as well as delisted companies Puli Pharmaceutical and Yuan Cheng Environment.

These companies have various issues. Among them, systemic financial fraud is the most severe and harmful. For example, *ST Changyao repeatedly falsified reports from 2021 to 2023, which directly triggered the regulations for major illegal violations leading to mandatory delisting; Yuan Cheng Environment, already delisted, engaged in long-term financial fraud and fraudulent issuance, ultimately resulting in nearly 80 million yuan in fines and confiscations, with the actual controller banned from securities markets for 10 years. Such cases typically involve long fraud cycles and large amounts, making them key targets for regulators.

Misappropriation of funds and related-party transactions are another common problem, reflecting core governance issues. Companies like Langjin Technology, ST Erya, and Jiangsu Sunshine have all involved major shareholders or controllers misusing company funds.

It is worth noting that as regulatory scrutiny over fund misappropriation tightens, such cases have significantly decreased. Many major shareholders who previously misused funds have gradually repaid the related amounts. Recent penalties are mostly for issues from the past that are being gradually cleared.

The speed from discovering clues to investigation and final penalties is accelerating. This signifies that regulators are undertaking a “systematic project” to reshape the overall market ecology.