On the evening of October 11th, $CICC (03908.HK)$ it was announced that the company received a "Notice of Case Filing" from the China Securities Regulatory Commission on the same day.

According to the "Notice of Case Filing", on September 25, 2024, the China Securities Regulatory Commission decided to file a case against the company for allegedly failing to fulfill its duties diligently in the recommendation business of the initial public offering of shares by Sierxin, in accordance with the laws and regulations of the Securities Law and the Administrative Penalty Law of the People's Republic of China.

On August 24, 2021, the Shanghai Stock Exchange accepted the application for the initial public offering of shares by Sierxin and its listing on the star market. Due to Sierxin's withdrawal of the issuance and listing application, the Shanghai Stock Exchange decided to terminate the review on July 27, 2022.

It is understood that Sierxin, as a first-time information disclosure quality spot check enterprise, was subject to an on-site inspection by the China Securities Regulatory Commission in December 2021, which found suspected illegal and irregular activities such as inflated revenue by the company. After the company withdrew its IPO application, the CSRC initiated an investigation and trial for suspected fraudulent issuance behavior.

Upon investigation, Sierxin fabricated significant false information in the company's securities issuance documents, with its prospectus containing false financial data. In 2020, the total inflated revenue amounted to 15.3672 million yuan, accounting for 11.55% of the annual revenue, and the total inflated profit amounted to 12.4617 million yuan, representing 118.48% of the annual profit.

On February 9th this year, the CSRC issued a document stating that administrative penalties have been imposed on Sierxin for fraudulent issuance misconduct during its application for initial public offering on the star market. This includes a fine of 4 million yuan imposed on Sierxin; fines of 3 million yuan each for the then Chairman of Sierxin Huang Xueliang, the then director, CEO, and general manager Toshio Nakama; fines of 2 million yuan each for the then director and senior vice president Lin Kaipeng, the then director, senior vice president, and board secretary Xiong Shikun; a fine of 1.5 million yuan for the then Chief Financial Officer of Sierxin Li Xiong; and a fine of 1 million yuan for the then Supervisory Board Chairman of Sierxin Yang Lu.

This case is the first fraudulent issuance case handled by the China Securities Regulatory Commission after the issuer submitted the application materials but before obtaining registration since the implementation of the new Securities Law.

On June 11th, the Shanghai Stock Exchange also imposed disciplinary sanctions, blacklisting the company for 5 years, which means not accepting any listing application documents submitted by Spower Semiconductor in the next 5 years.

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