Sante Cableways fined 10.5 mln yuan for disclosure violations; ex-controller Ai Luming fined 11 mln yuan, banned from market for life

September 18 — SanTe Cable Car Co., Ltd. (002159) announced on the evening of September 18 that it had received an "Administrative Penalty Decision" from the Hubei Bureau of the China Securities Regulatory Commission (CSRC) for failing to timely disclose non-operational fund occupation by related parties and for material omissions in its 2019 and 2020 annual reports.

The company was fined RMB 10.5 million, while former actual controller Ai Luming was fined RMB 11 million and received a lifetime ban from the securities market.

Details of the Violations

According to the announcement, starting in 2019, due to the funding needs of its indirect controlling shareholder, Dangdai Group, SanTe Cable Car transferred funds to designated recipients specified by Dangdai Group. The funds were ultimately routed to Dangdai Group, its related parties, and partners, resulting in non-operational fund occupation by related parties.

Key undisclosed fund transfers included:

• August 3 to December 2020: RMB 340 million transferred to Dangdai Group, accounting for 31.89% of the most recent audited net assets
• 2021: RMB 1.904 billion transferred, accounting for 131.67% of net assets
• January 2022: RMB 500 million transferred, accounting for 34.58% of net assets

These fund occupations were neither disclosed in a timely manner nor reported in the 2019 and 2020 annual reports, constituting material omissions. In 2019 alone, non-operational fund occupation between SanTe Cable Car and Dangdai Group amounted to RMB 1.423 billion, representing 133.49% of the net assets recorded in that year's annual report, though the year-end balance was zero.

Disclosure and Recovery

The non-operational fund occupation from 2019 to 2022 was not disclosed until April 30, 2022, in an "Announcement on the Reply to the Shenzhen Stock Exchange's Inquiry Letter." By April 2022, SanTe Cable Car had fully recovered all funds and interest occupied by Dangdai Group.

Regulatory Findings and Penalties

The Hubei Bureau determined that Ai Luming, as the then-actual controller, repeatedly instructed SanTe Cable Car to provide financial support to Dangdai Group, constituting a case of an actual controller directing illegal conduct. The information disclosure violations spanned four years, with high amounts and proportions of fund occupation.

Lu Sheng, then-chairman of the company, was aware of and participated in approving the transfers. He neither prevented nor timely reported the violations during their occurrence, and subsequently allowed the illegal conduct to continue and recur. His claim of having signed under duress was rejected, as the bureau found it did not reach the level of loss of free will required to mitigate liability for information disclosure violations.

The Hubei Bureau imposed the following penalties:

• SanTe Cable Car: Warning and fine of RMB 10.5 million
• Lu Sheng: Warning and fine of RMB 3 million
• Ai Luming: Fine of RMB 11 million, plus a lifetime ban from the securities market

Investigation Timeline

In August 2023, SanTe Cable Car disclosed that the CSRC had decided to investigate the company and Ai Luming for suspected violations of information disclosure regulations. In March 2026, the company and relevant responsible parties received an "Advance Notice of Administrative Penalty" from the Hubei Bureau. The issuance of the "Administrative Penalty Decision" marks the conclusion of the three-year investigation with regulatory sanctions.

Company Status

SanTe Cable Car has since transitioned from a privately controlled listed company to a state-controlled one. In June 2023, Gaoke Group became the controlling shareholder of SanTe Cable Car, and the Wuhan East Lake High-Tech Development Zone Management Committee became the company's actual controller.

The company stated that after receiving the "Advance Notice of Administrative Penalty," it had already accrued the fine expense, which was reflected in its 2026 semi-annual report. As of now, all production and business operations are normal, and the above matters will not have a significant impact on the company's operations.