What happened
After market close on Sept. 2, Sichuang Zhilian (300078) announced it had received an indictment from the Hangzhou People's Procuratorate, charging the company and seven individuals — including then-chairman Zhang Lijia — with suspected fraudulent issuance of securities and illegal disclosure or nondisclosure of important information.
Prosecutors said the company fabricated major false content in its bond prospectus and publicly issued bonds of a huge scale. Zhang Lijia was described as the principal offender, while six former executives, including Xue Qiwei and Wang Jianwei, were treated as accomplices and recommended for lighter punishment.
The company said the case has not yet gone to trial, making the outcome and its impact on finances and operations uncertain and subject to the court's final judgment. On Sept. 3 morning, its shares fell 11.36% to 2.81 yuan at the midday close.
Why it matters
The case stems from a 2020 convertible bond plan that the company — then known as Sichuang Yihui — launched to boost its artificial intelligence healthcare business. CITIC Securities acted as sponsor, issuing documents that promised accuracy and pledged compensation for investor losses from false statements.
After the fraudulent issuance was uncovered, the Shenzhen Stock Exchange issued a regulatory letter to CITIC Securities for inadequate sponsor duties and weak internal quality control, and publicly criticized the two named sponsor representatives for failing to verify large prepayments and potential asset occupation by controlling shareholders.
Key facts
The indictment charges the company and seven executives, including former chairman Zhang Lijia, with fraudulent securities issuance and illegal disclosure violations.
In August 2025, Sichuang Zhilian completed the transfer of the full 100% equity stake in its subsidiary Yihui Technology, which was then excluded from its consolidated reporting.
Wind data cited in the report shows that since 2026, CITIC Securities has underwritten convertible bond projects totaling about 14 billion yuan by issue date, far ahead of second-ranked Huatai Securities.
What to watch next
A court hearing has not yet been scheduled, so the final verdict and any penalties for the company and the indicted executives remain unresolved.
The company's divestiture of its medical technology subsidiary may alter its financial position, but the full impact depends on the court's ruling and the case's eventual outcome.