Public security authorities in China are adopting a comprehensive approach to tackling financial fraud by listed companies, focusing on executives, controlling shareholders, actual controllers, intermediaries, and third parties involved in falsifying information, a police official announced on Wednesday.

Lang Junyi, head of the second branch of the Ministry of Public Security's securities crime investigation bureau, emphasized that police have maintained a "zero tolerance" policy toward crimes that significantly harm investors, including fraudulent disclosure, securities fraud, misappropriation of funds, and duty-related embezzlement.

Lang noted that efforts are being made to minimize the impact of investigations on the normal business operations, share prices, and restructuring efforts of listed companies.

In a notable case, police launched an investigation in May 2024 into a listed company suspected of illegally disclosing important information. Investigators discovered that from 2017 to 2022, the company's chairman and general manager, surnamed Ji, colluded with its chief financial officer, surnamed Yuan, and others to inflate revenue and profits. The company allegedly filed false annual reports for six consecutive years, overstating total profits by nearly 820 million yuan ($120 million).

Further investigations revealed that the company initiated a private placement project in 2019 and issued A-shares to a Nantong-based company in Jiangsu province in January 2021, raising 800 million yuan. However, the financial indicators from 2017 to 2019 cited in the issuance documents submitted to regulators and disclosed to the public contained significant false information.

Ji, Yuan, and others signed the documents as directors, senior executives, and supervisors despite being aware of the issues, and were suspected of fraudulent securities issuance, police said.

The investigation also uncovered suspected misconduct by an accounting firm, where two partners allegedly issued false annual audit reports for the company for several consecutive years. Police arrested 10 suspects in connection with the case.

In September 2025, the Shanghai No 3 Intermediate People's Court sentenced Ji and Yuan to six years and four years and eight months in prison, respectively, with other individuals involved also being held criminally liable.