The Great Wall Group fell under the investigation of the Chinese regulator after its shares rose sharply against the backdrop of the company’s expressed interest in blockchain.
Great Wall Group, whose shares rose for five consecutive days last week after President of the People’s Republic of China Xi Jinping called
accelerate the implementation of the blockchain, said Monday that it is under investigation by the China Securities Regulatory Commission (CSRC).
The investigation began after calls
governments to “rational” investments in Chinese blockchain and fintech firms. The Great Wall Group, which began manufacturing porcelain products in 1996, revealed the details of six blockchain projects in its annual report for 2018, but the regulator questioned the firm’s real interest in blockchain in light of the recent increase in its shares.
According to the statement
A company listed on the Shenzhen Stock Exchange, the regulator is investigating possible violations of disclosure rules.
“In accordance with the Securities Act of the People’s Republic of China, the CSRC decided to start a study of the firm,” the statement said.
On October 28, the company received another request.
from the Shenzhen Stock Exchange, asking for an explanation of how her business is related to the blockchain industry. The exchange demanded more detailed explanations about six research and development projects, which, according to the company, were connected with the blockchain. The exchange wants more details, including project history, cycles, investment volumes, research team and specific use cases.
The exchange also demanded to provide information on the profit received from the projects, and how the realized profit and the income from them affect the total profit of the company for the last year and the first three quarters of 2019. According to the company’s response, two of the six projects are being developed by its online learning subsidiary Zhiyou Education, which plans to create a cryptocurrency ecosystem based on OK Angel Coin software that has not yet been developed.
“These two projects have not yet affected our revenues or profits,” the company said.
The Shenzhen Stock Exchange may suspend trading in Great Wall shares if the company cannot report for the last two fiscal years.
Last March, the Shenzhen Stock Exchange announced
on the investigation of the activities of the second open joint-stock company after a statement on partnership with a blockchain startup. At the beginning of 2018, the exchange issued a warning through its WeChat channel that stock prices of companies are rising after blockchain-related announcements that are not always reliable.
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