Yunchuang Data (*ST Yunchuang, 920001.BJ), a listed company on the Beijing Stock Exchange, issued several negative announcements just before the May Day holiday. These included a prior notice of administrative penalties, a risk warning of stock termination, and an annual report receiving an audit opinion with an inability to express a conclusion. These developments indicate that the company has little future to look forward to.

Public information reveals that Yunchuang Data, which went public on the Beijing Stock Exchange in August 2021, engaged in financial fraud for nearly five years from 2020 to the first half of 2024. The company inflated its revenue and profits through contracts lacking commercial substance and fraudulent disposal of construction-in-progress assets. Cumulatively, it overstated revenue by over 700 million yuan and profits by nearly 300 million yuan.

Particularly in 2023, the company inflated its profits by 49.9725 million yuan, accounting for 405.10% of the total profit reported for that period. This concealed the fact that the company had actually incurred losses.

During this prolonged period of significant financial fraud, Yunchuang Data managed to deceive several securities firms. For instance, in 2023, the year with the highest proportion of inflated profits, Huaxin Securities published a research report titled "Big Data Storage Technology Continuously Upgraded, Persistently Increasing Investment in the Generative AI Field." Analysts Huang Junwei, Ren Chunyang, and Bao Youchen praised the company for its "leading technology, excellent localization, forward-looking layout in big data storage and intelligent processing products, and continued investment in the generative AI field," giving it a "Buy" investment rating.

The reality, however, was fully exposed in the prior notice of administrative penalties issued by the regulatory authorities.

Notably, the period during which Yunchuang Data committed financial fraud spanned its listing on the Beijing Stock Exchange. This implies that the company engaged in fraudulent practices for its initial public offering and securities issuance. It is not difficult to imagine that severe penalties, including lawsuits for compensation from affected investors, await the company.

However, it should be noted that as of the end of 2025, Yunchuang Data had less than 80 million yuan in monetary funds on its books, which is insufficient to cover its 120 million yuan in short-term borrowings. Even if willing, the company likely lacks the ability to provide compensation to affected investors in subsequent lawsuits. What then?

There is a solution. Behind Yunchuang Data stands its sponsor, CSC (601066.SH). Public records show that when Yunchuang Data conducted its IPO on the Beijing Stock Exchange in 2021, CSC was the sponsoring institution, with Wang Gailin and Liu Shaoqian serving as the sponsor representatives. It is undeniable that in the process of Yunchuang Data's IPO fraud, CSC, as the sponsor, bears responsibility for inadequate due diligence, even if it did not mastermind the scheme.

Against the backdrop of regulatory authorities repeatedly emphasizing the need to "strengthen the responsibility of intermediary agencies as gatekeepers," CSC, which received substantial sponsorship and underwriting fees, should also be held accountable.

Meanwhile, what responsibilities should the sponsor representatives, Wang Gailin and Liu Shaoqian, who brought the heavily fraudulent Yunchuang Data to the capital market, bear? How will this impact their professional careers?