(Yicai Global) Oct. 12 -- The Securities Association of China voted to relieve Mr. Zhang Changhong of his duties as director over accusations his former company Shanghai DZH Ltd. [SHA:601519] falsified company profit reports while he was chairman.
DZH misreported a CNY120 million (USD18 million) increase in profit three years ago. This July, China's securities regulator warned the company and 14 of its managers, including Mr. Zhang, and imposed fines of CNY30,000 to CNY300,000. Mr. Zhang and four other offenders were also banned from securities markets for five years. He resigned as director, chairman and general manager of DZH in late July.
An A-share market listed company whose audited net profit stays in the red for two consecutive fiscal years receives a delisting risk warning, and must delist if it fails to turnaround in the third year.
After its losses in 2012, Shanghai DZH fabricated its profit reports in order to whitewash its losses.