Celt and related parties received corrective measures from Anhui Securities Regulatory Bureau regarding violations including improper use of raised funds and other issues

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Anhui Sierte (Rights Protection) Fertilizer Co., Ltd. (Stock code: 002538, Stock abbreviation: Sierte) announced on March 27, 2026 that the company and relevant parties have received from the Anhui Securities Regulatory Bureau of the China Securities Regulatory Commission (hereinafter referred to as “Anhui CSRC”) the “Administrative Regulatory Measures Decision,” which, due to multiple violations, imposed administrative regulatory measures requiring rectification on the company and related parties, Anhui Ningguo Agricultural Production Materials Co., Ltd. (hereinafter referred to as “Ningguo Agricultural Materials”) and Xuancheng Dongchen Healthy Industry Management Co., Ltd. (hereinafter referred to as “Dongchen Healthy”), and recorded them in the securities and futures market integrity file.

In the “Decision,” Anhui CSRC stated that Sierte has four major categories of violations:

First, it violated rules on the use of funds raised through private placements. Between 2016 and 2019, Sierte improperly used a total of 11531.17 million yuan of funds raised through private placements; in the process, it caused losses of 3301.46 million yuan and led to its related party, Ningguo Agricultural Materials, non-operationally occupying listed company funds of 3680.63 million yuan.

Second, it provided funds to related parties through improper inter-borrowing and the information disclosure was inaccurate. During the period when the company’s subsidiary, Anhui XinHongda Healthy Industry Management Co., Ltd., was managing Dongchen Healthy under a custody arrangement, the then chairman, Jin Guoqing, concealed its shareholding in Dongchen Healthy, resulting in inaccurate information disclosure; at the same time, XinHongda Healthy provided loans to Dongchen Healthy under the custody arrangement, causing Dongchen Healthy to non-operationally occupy listed company funds of 1.1 hundred million yuan; currently, 3200 million yuan remains unpaid.

Third, periodic reports were inaccurately disclosed. Due to fabricating engineering construction projects, revenue and costs, etc., Sierte caused data for 2024 and parts of previous years regarding revenue, costs, fixed assets, etc. to be inaccurate; there were issues with the disclosure of information in the periodic reports for those relevant years.

Fourth, corporate governance and internal controls were not sound. There were behaviors such as inadequate procedures for deliberation and decision-making on major matters, failure to effectively prevent the occupation of funds by shareholders and related parties, and related-party transactions with the then director, Li Gang, that were conducted without review and approval procedures.

According to the requirements of the “Decision,” Ningguo Agricultural Materials and Dongchen Healthy should actively repay the occupied funds; Sierte must take measures to recover the occupied funds, improve corporate governance and internal controls, conduct rectification of relevant financial accounting and periodic report information disclosure in accordance with enterprise accounting standards, and submit a written rectification plan within 30 days from the date it receives the decision; all occupied funds must be repaid within 6 months; after completion of the rectification, a written report must be submitted.

Sierte said that the company attaches great importance to the issues pointed out in the “Decision.” It will strictly summarize them and actively carry out rectification in accordance with requirements, and promptly submit a written rectification report. The company will continue to strengthen its study of relevant laws and regulations, enhance compliance awareness, improve governance mechanisms, and raise the level of standardized operations and information disclosure to safeguard the interests of the company and all shareholders. The announcement also emphasized that the above regulatory measures will not have an impact on the company’s production and operations or financial condition; currently, its production and operations are normal.

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Responsible editor: Xiao Lang Express