On January 15, 2025, Huaya Media disclosed that the company and its actual controller, Su Tong, were placed under investigation by the China Securities Regulatory Commission (CSRC) for suspected violations in information disclosure regulations. Following this, regulatory scrutiny intensified, and the company's specific disclosure-related issues gradually came to light.
On August 23, 2025, the company announced that it had received a "Notice of Administrative Penalty" from the Beijing Regulatory Bureau on August 22. Subsequently, on September 11, the company announced it had received the "Administrative Penalty Decision" from the same bureau, officially concluding the matter.
An investigation revealed that Huaya Media failed to properly disclose non-operational fund occupation by its controlling shareholder and actual controller. In 2021, the company and its subsidiaries provided funds totaling RMB 181.53 million to Su Tong through related investment management firms, constituting non-operational fund occupation. This fund occupation was not disclosed in several periodic reports as required. Notably, both the 2021 semi-annual report and the annual report failed to disclose the full amount of RMB 181.53 million, representing 10.02% and 7.84% of the respective net assets at those periods. The outstanding balance of these occupied funds continued to impact the financials through to the 2023 semi-annual report.
Additionally, the company was found to have inadequately provisioned for bad debts on accounts receivable. Due to under-provisioning for bad debts on a single client's receivable, the company's 2021 and 2022 annual reports overstated profit before tax by RMB 17.3296 million and RMB 69.3931 million, respectively, accounting for 6.72% and 10.31% of the reported profit for those periods.
In response to these financial issues, Huaya Media issued an announcement on July 10, 2025, correcting the prior accounting errors and making retrospective adjustments. Meanwhile, as of December 31, 2023, all previously occupied funds had been fully recovered.
The regulatory process, from investigation to penalty, spanned several months. This case, which involves both fund occupation disclosure failures and financial misinformation, underscores the critical importance of robust corporate governance and transparent information disclosure for listed companies.
Lawyer Liu Peng from Shanghai Huzi Law Firm stated that investors meeting the following criteria are eligible to register for claim compensation: those who purchased shares between January 1, 2021, and January 14, 2025 (inclusive), and either sold them after January 15, 2025, or continued to hold them, incurring losses.
Affected investors can register for claims through the platform on Sina Finance's mobile app by searching for "信息披" (Information Disclosure).