The company Ylz Information Technology Co.,Ltd. (referred to as Ylz, ST Yilzhong (Rights Protection), code: 300096) announced on June 13, 2026, that it had received an advance notice of administrative penalty from the regulator. The notice stated that due to suspected violations of information disclosure regulations by the company's controlling shareholder, actual controller, and then-chairman Mr. Zhang Xi, the China Securities Regulatory Commission (CSRC) has decided to file a case against him.
An investigation by the CSRC's Xiamen Bureau found the following main alleged violations by Ylz Information Technology:
First Violation: Failure to Timely Disclose Guarantees for Related Parties and Material Omissions in Relevant Periodic Reports
Zhang Xi was the controlling shareholder and actual controller of Ylz. In October 2018, Zhang Xi privately used Ylz's name to provide a guarantee for a 550 million yuan loan from Zhang Liyun to himself and his related party, Beijing Jingfa Real Estate Co., Ltd. (hereinafter referred to as Jingfa Real Estate). The guarantee amount represented 71.61% of Ylz's audited net assets for 2017, constituting a guarantee for a related party. In May and June 2020, Zhang Xi again privately used Ylz's name to reconfirm guarantees for the remaining debt balances of 542 million yuan and 555 million yuan (after deducting debt offsets) related to the aforementioned loan. These guarantee amounts represented 62.02% and 63.52% of Ylz's audited net assets for 2019, respectively. In August 2024, the Beijing Arbitration Commission ruled that Ylz was not liable for the guarantee obligations. The outstanding balances of these guarantees in the company's annual reports from 2018 to 2022 and the 2023 semi-annual report were 543 million yuan, 590 million yuan, 535 million yuan, 494 million yuan, 564 million yuan, and 599 million yuan, respectively, representing 65.15%, 67.46%, 58.94%, 63.85%, 142.66%, and 179.65% of Ylz's disclosed net assets for the respective periods.
According to relevant provisions of the Securities Law of the People's Republic of China (2005 Revision) and the Securities Law of the People's Republic of China (2019 Revision), Ylz should have promptly disclosed these guarantee matters. However, the company did not disclose them until November 28, 2023.
Simultaneously, based on regulations including the Securities Law and the relevant content and format guidelines for information disclosure of companies issuing securities publicly, Ylz was required to disclose these guarantee matters in its annual reports from 2018 to 2022 and its 2023 semi-annual report. The failure to do so resulted in material omissions in the corresponding periodic reports.
Second Violation: Failure to Timely Disclose Loans to Related Parties and Material Omissions in Relevant Periodic Reports
In February 2018, due to a personal funding shortfall, Zhang Xi privately used Ylz's name to borrow 60 million yuan from Suzhou Nuo Jin Investment Co., Ltd. (hereinafter referred to as Suzhou Nuo Jin). The entire loan amount was transferred directly by Suzhou Nuo Jin into a bank account under the name of Jingfa Real Estate. The loan amount represented 8.06% of Ylz's audited net assets for 2016, constituting a non-operating fund occupation by a related party. In April 2018, Zhang Xi repaid 30 million yuan of the loan. The remaining loan was repaid in May 2023. The outstanding balances of this loan in the company's annual reports from 2018 to 2022 were 37 million yuan, 44 million yuan, 50 million yuan, 55 million yuan, and 59 million yuan, respectively, representing 4.39%, 5.01%, 5.51%, 7.06%, and 14.94% of Ylz's disclosed net assets for the respective periods.
According to relevant provisions of the Securities Law, Ylz should have promptly disclosed these loan matters. However, the company did not disclose them until November 28, 2023.
Simultaneously, based on regulations including the Securities Law and the relevant content and format guidelines for information disclosure of companies issuing securities publicly, Ylz was required to disclose these loan matters in its annual reports from 2018 to 2022. The failure to do so resulted in material omissions in the corresponding periodic reports.
Third Violation: Failure to Timely Disclose Joint Loans with Related Parties and Material Omissions in Relevant Periodic Reports
In March 2021, due to a funding shortfall for Zhang Xi's sister, Zhang Huafang, Zhang Xi and Zhang Huafang privately used Ylz's name to sign a joint loan agreement. They, along with a third party, borrowed 50 million yuan from Gao Cai'e. The entire loan amount was transferred directly by Gao Cai'e into a bank account under Zhang Huafang's name. The loan amount represented 5.72% of Ylz's audited net assets for 2019, constituting a related-party transaction. In August 2025, the Hangzhou Intermediate People's Court issued a second-instance judgment, ruling that Ylz was not liable for repayment. The outstanding balances of this joint loan in the company's annual reports for 2021 and 2022 and the 2023 semi-annual report were 52 million yuan, 54 million yuan, and 55 million yuan, respectively, representing 6.70%, 13.65%, and 16.52% of the disclosed net assets for the respective periods.
According to relevant provisions of the Securities Law, Ylz should have promptly disclosed these joint loan matters. However, the company did not disclose them until November 28, 2023.
Simultaneously, based on regulations including the Securities Law and the relevant content and format guidelines for information disclosure of companies issuing securities publicly, Ylz was required to disclose these joint loan matters in its annual reports for 2021 and 2022 and its 2023 semi-annual report. The failure to do so resulted in material omissions in the corresponding periodic reports.
Fourth Violation: Failure to Timely Disclose Major Litigation and Arbitration and Material Omissions in Relevant Periodic Reports
In February 2023, the Beijing Arbitration Commission accepted an arbitration application from Zhang Liyun requesting Ylz and related parties to repay loan principal, interest, and default penalties totaling 713 million yuan. Relevant documents were sent to Ylz and related parties, but Zhang Xi handled and concealed them privately. In March 2023, the Suzhou Industrial Park People's Court accepted a civil lawsuit from Suzhou Nuo Jin requesting Ylz to repay loan principal, interest, and default penalties totaling 55.5827 million yuan. Relevant documents were sent to Ylz, but Zhang Xi handled and concealed them privately. The amount involved in the aforementioned arbitration represented 92.10% of Ylz's audited net assets for 2021. The total amount involved in the aforementioned litigation and arbitration was 768 million yuan, representing 99.28% of Ylz's audited net assets for 2021.
According to relevant provisions of the Securities Law, Ylz should have promptly disclosed these litigation and arbitration matters. However, the company did not disclose them until November 28, 2023. Furthermore, the amount involved in these litigation and arbitration matters represented 230.52% of the net assets disclosed in Ylz's 2023 semi-annual report.
Based on regulations including the Securities Law and the relevant content and format guidelines for information disclosure of companies issuing securities publicly, Ylz was required to disclose these litigation and arbitration matters in its 2023 semi-annual report. The failure to do so resulted in material omissions in the corresponding periodic report.
Therefore, the CSRC's Xiamen Bureau intends to decide: to issue warnings to Ylz, Zhang Xi, and other relevant responsible personnel, and impose fines on each.
Previously, on November 28, 2023, Ylz released an announcement regarding the existence of违规担保 (irregular guarantees),违规借款 (irregular loans), and the company's involvement in major litigation and arbitration matters. As of the disclosure date of that announcement, the company had provided guarantees totaling 550 million yuan and related interest for external loans to Beijing Jingfa Real Estate Co., Ltd. (formerly controlled by Mr. Zhang Xi) without undergoing法定审批程序 (statutory approval procedures). There remained an outstanding balance of 50 million yuan and related interest for对外共同借款/共同担保 (external joint loans/joint guarantees) also undertaken without法定审批程序 (statutory approval procedures). The company's board of directors and management attached great importance to this incident and actively organized verification and investigation of the matter. On November 30, 2023, Ylz announced that its controlling shareholder, actual controller, and then-chairman Mr. Zhang Xi had received a case filing notice from the CSRC due to suspected violations of information disclosure regulations. On May 9, 2024, Ylz announced that it had received a case filing notice from the CSRC because the company was suspected of failing to disclose information such as guarantees provided for related parties as required, constituting information disclosure violations.
According to the Civil Code, the Securities Law, and judicial interpretations from the Supreme People's Court regarding civil compensation for false statements, listed companies, controlling shareholders, actual controllers, directors, supervisors, senior management personnel, and their intermediaries shall bear civil liability for compensation if证券欺诈行为 (securities fraud acts) such as false statements lead to damage to the rights and interests of securities investors. The scope of compensation includes: investment loss differentials, commissions, stamp duty, and interest losses. Securities investors whose rights and interests have been damaged may file civil compensation lawsuits with courts having jurisdiction.
As the actual controller of Ylz is suspected of violating information disclosure regulations and faces a penalty notice from the CSRC, to safeguard the legitimate rights and interests of securities investors, lawyer Song Yixin from Shanghai Hanlian Law Firm is initiating a collection of litigation agency for securities investors who have previously purchased Ylz securities, to act as agent for investor compensation lawsuits. Investors whose rights and interests have been damaged can register their claims with the aforementioned lawyer.
Lawyer Song Yixin believes the claim conditions for the Ylz case are: investors who suffered losses by purchasing Ylz stocks, bonds, or other publicly issued products in the securities market between April 23, 2019, and November 27, 2023, and sold or continued to hold them on or after November 28, 2023, can register for claim proceedings.
Important Legal Notes and Disclaimers Regarding the Case
1. The aforementioned claim conditions are for reference only and do not constitute any securities investment decision-making or trading advice for investors. The final claim conditions will be further adjusted based on the conclusions of the CSRC's administrative penalty and will be subject to the legal time points, compensation targets, compensation scope, compensation standards, and accounting calculation methods determined by the final effective judgment of the relevant court.
2. Although the前置条件 (precondition) of an administrative penalty decision being a characteristic has been取消 (removed), allowing investors to file lawsuits directly, due to limited investigation means, there is a risk of losing a lawsuit if using the case filing investigation notice or administrative regulatory measure decision as the basis for direct litigation. Therefore, as a professional lawyer, I提示 (remind) investors that an administrative penalty decision should still be considered one of the necessary prerequisites for filing a lawsuit.
3. In拟提起的 (intended) civil tort litigation cases, whether the listed company delists or not does not affect the progress of the civil compensation tort litigation, but it might affect the litigation timeline. If the company enters破产程序 (bankruptcy proceedings) (including reorganization, pre-reorganization, or liquidation), the potential impact on the litigation timeline could be significant. If representative litigation occurs, you can choose to participate or not, join or withdraw.
4. Investors registering or pre-registering claims should provide the following materials: (1) A copy of their "Identity Card". (2) The original "Securities Account Opening Information Confirmation Form" (stamped by the securities company's business department). (3) The original "Securities Transaction Record Statement" from the first purchase of the stock/bond/warrant, etc., to the present (stamped by the securities company's business department).
Profile of Lawyer Song Yixin
He has been practicing law since 1992 and is currently a partner at Shanghai Hanlian Law Firm. His service areas mainly include legal services for capital markets, securities markets, and financial markets, as well as维护 (safeguarding) the rights and interests of investors/financial consumers. Throughout his practice, he has provided legal services for over 10,000 securities litigation matters or shareholder dispute matters. He has authored and compiled books such as "Securities Law: Principles and Practice," "Practical Handbook for Securities Civil Compensation," "Stock Market Rights Protection," "Compilation of Judicial Judgment Documents for Chinese Securities Civil Compensation Cases," and "Director Liability Insurance and Investor Rights Protection."