Financial Services Association, April 15 (Reporters Liu Yue and Zeng Chuchu) After the subsidiary recently underwent another tax inspection, Zangge Mining (000408.SZ) is on the cusp again, this time because the company's actual controller, Xiao Yongming, was involved in a criminal case where coercive measures were taken.

Zangge Mining announced this evening that it received a notice from the family of Xiao Yongming, the actual controller of the company. Xiao Yongming was living under surveillance at the designated residence by the Zigong Public Security Bureau due to suspected criminal cases.

According to the announcement, Xiao Yongming does not currently hold the position of director, supervisor or senior management of the company. The above matters do not have a significant impact on the company's daily production and operation; nor will it cause major uncertainty about the company's equity ownership, and will not adversely affect the stability of the company's control rights. At present, the company's daily operations are normal, and all tasks are being carried out in an orderly manner.

As of December 31, 2023, Xiao Yongming directly held 156 million shares of Zangge Mining, accounting for 9.85% of the total share capital, making him the company's third largest shareholder. At the same time, Xiao Yongming also holds 90% of the shares of Xizangge Venture Capital Group Co., Ltd., the largest shareholder of the listed company, and 61.33% of the shares of Sichuan Yonghong Industrial Co., Ltd., the fourth largest shareholder.

In the “2016 Hurun 100 Wealth List”, Xiao Yongming once ranked 64th with 26.5 billion yuan, making him the richest person in Qinghai.

In response to Xiao Yongming's suspected criminal case, attorney Yang Bin, director of Beijing Quanding Law Firm, told the Financial Federation reporter that being designated for residential surveillance is a compulsory measure. The maximum period is usually 6 months, and it will later be referred to the procuratorate for examination and prosecution depending on the circumstances.

However, this is not the first time that Xiao Yongming has been suspected in a criminal case. He was once convicted for illegal mining, and his sentence was commuted to acquittal the following year. In June 2022, Zangge Mining announced that Xiao Yongming received a “Criminal Judgment” for the crime of illegal mining and was sentenced to three years in prison, suspended for four years, and fined 2 million yuan. In August 2023, the People's Court of Chengxi District of Xining City handed down a verdict that Xiao Yongming did not constitute an illegal mining crime and his sentence was commuted to his acquittal.

It is worth noting that the Zangge mining industry has been in turmoil since this year. Its subsidiary Golmud Zangge Potash Co., Ltd. has been subject to tax inspections twice, with a total of 668 million yuan in taxes and late fees.

Specifically, Zangge Mining announced on April 10 that the subsidiary Zangge Potash will have to pay a total of 480 million yuan in value-added tax, resource tax, corporate income tax and other related taxes and late fees from 2021 to 2023, which is expected to directly affect the profit and loss of listed companies. More than a month ago, on March 8, Cangge Mining announced that a total of about 56 million yuan in taxes and fees from 2004 to 2014, and 132 million yuan in late payment fees, totaling about 188 million yuan.

According to data, in the second half of 2016, Zangge Mining completed a major asset restructuring. Currently, its main business is mining mineral resources (non-coal mines). The main products are potassium chloride and lithium carbonate. In 2023, the company achieved net profit of 3.42 billion yuan attributable to shareholders of listed companies.