On July 5th, Gelunhui reported that *Jiangsu Zhongli Group (002309.SZ) disclosed that it had received an Administrative Penalty Decision Letter issued by the China Securities Regulatory Commission. It was found that the dedicated network communication business carried out by Zhongli Group and its subsidiary Zhongli Electronics, either by upstream or downstream companies controlled directly or indirectly by Sui Moulai, or the dedicated network communication business of upstream or downstream companies was directly controlled by Sui Moulai. Sui Moulai was in charge of the whole process of contract formulation, signing, and performance of the dedicated network communication business. Zhongli Group mainly communicated and coordinated with Sui Moulai. The production-oriented dedicated network communication business carried out by Zhongli Group and Zhongli Electronic cannot independently select suppliers and customers, cannot control purchase progress and sales flow, there is no core technology in the assembly process, and there is no control over sales receipts. The trade-oriented dedicated network communication business carried out by Zhongli Group and Zhongli Electronic has no trade substance, cannot control the arrival and shipment of goods, and does not participate in the circulation of goods. The dedicated network communication business contract flow and physical flow of Zhongli Group and Zhongli Electronic form a closed loop, and the business fund flow also forms a closed loop. Zhongli Group and Zhongli Electronic are parts of Sui Moulai's false self-circulation business of dedicated network communication, and they play the role of financing by account period. At the beginning of 2019, when Zhongli Electronic's dedicated network communication business receivables were difficult to collect, Wang Boxing and Sui Moulai agreed that Sui Moulai would first pay part of the final payment to allow Zhongli Electronics to repay the due financing loan, and then obtain financing by signing a new purchase contract to maintain business operation and fund circulation.

In 2016, Zhongli Group inflated its operating income by CNY 1,281,802,547.02, accounting for 11.35% of the disclosed operating income for the period, and inflated the total profit by CNY 261,528,040.50, accounting for 231.07% of the disclosed total profit for the period. In 2017, Zhongli Group inflated its operating income by CNY 1,882,666,666.67, accounting for 9.70% of the disclosed operating income for the period, and inflated the total profit by CNY 415,223,618.31, accounting for 102.49% of the disclosed total profit for the period. It was measured that the net profit attributable to the parent company of Zhongli Group in 2017 was positive. In 2018, Zhongli Group inflated its operating income by CNY 1,925,024.966.12, accounting for 11.51% of the disclosed operating income for the period, and inflated the total profit by CNY 422,962.518.11, accounting for 214.90% of the disclosed total profit for the period. In 2019, Zhongli Group inflated its operating income by CNY 2,196,861,238.94, accounting for 18.58% of the disclosed operating income for the period, and inflated the total profit by CNY 531,640,379.15, accounting for 246.08% of the disclosed total profit for the period. In 2020, Zhongli Group inflated its operating income by CNY 671,524,955.75, accounting for 7.43% of the disclosed operating income for the period, and inflated the total profit by CNY 47,327,211.57, accounting for 1.88% of the disclosed total profit for the period.

Based on the facts, nature, circumstances, and degree of social harm of the illegal acts of the parties concerned, and in accordance with the provisions of Article 197(2) of the Securities Law, the following decisions were made: (1) Exhort Jiangsu Zhongli Group Co., Ltd. to make corrections, issue a warning and impose a fine of CNY 8 million; (2) Issue a warning to Wang Boxing, impose a fine of CNY 15 million, of which the person in charge responsible for illegal information disclosure of the direct responsible person is fined CNY 5 million, and the actual controller who organizes and drives non-business fund occupation, violation of guarantee-related information disclosure illegal behavior is fined CNY 10 million; (3) Issue a warning to Wang Weifeng and Qian Hongyi, and impose fines of CNY 3 million respectively; (4) Issue a warning to Chen Bohan, Sun Jianyu and Wu Hongtu, and impose fines of CNY 500,000 respectively.

In view of the particularly serious illegal circumstances of Wang Boxing, in accordance with the provisions of Article 221 of the Securities Law and Article 3, Paragraph 1 and Article 7, Paragraph 1, Item 3 of the Securities Market Prohibition Regulations (CSRC Order No. 185, hereinafter referred to as the same), I will decide to take lifelong securities market ban measures against Wang Boxing. In view of the serious illegal circumstances of Qian Hongyi, in accordance with the provisions of Article 221 of the Securities Law and Article 3, Paragraph 1 and Article 7, Paragraph 1 of the Securities Market Prohibition Regulations, I will decide to take a three-year securities market ban measures against Qian Hongyi. From the date of the announcement of the decision by the CSRC, during the period of prohibition, they will not be allowed to continue to engage in securities business, securities service business or serve as directors, supervisors, and senior management personnel of the original securities issuer in the original institution, nor will they be allowed to engage in securities business, securities service business or serve as other securities issuers. Directors, supervisors, and senior management personnel in any other institutions.