Key facts
- Tongtech Chairman Qu Tao has been taken into police custody for alleged involvement in a financial fraud scheme.
- The company is under investigation by the CSRC for false financial reporting in its 2019-2022 annual reports.
- Tongtech's 2022 private placement of shares is also cited as fraudulent issuance.
- The company faces potential mandatory delisting from the Shenzhen Stock Exchange.
- Tongtech's stock price fell over 30% in two consecutive trading days amid the probe.
Qu Tao, the chairman of Beijing Tongtech Co. Ltd., has been taken into police custody for his alleged role in a multiyear financial fraud scheme, according to sources familiar with the matter. The company, a delisted Chinese software developer, has not publicly disclosed this action.
Tongtech is facing a potential mandatory delisting after the China Securities Regulatory Commission (CSRC) issued an administrative penalty pre-notification on September 12, 2025. The CSRC's findings suggest that the company's annual reports from 2019 to 2022 contained false information, and its 2022 private placement of shares constituted fraudulent issuance, citing false financial data from 2019 to 2021. These alleged violations could trigger mandatory delisting under the Shenzhen Stock Exchange's ChiNext Stock Listing Rules.
The company was initially placed under investigation on April 14, 2025, for suspected false financial reporting. Tongtech stated it will cooperate with the CSRC and exercise its legal rights. The final outcome depends on the CSRC's official decision, which could lead to the termination of the company's listing.
In a related development, Huang Yongjun, the company's actual controller and chairman, announced the full unpledging of his 19,600,000 shares, representing 47.80% of his holdings and 3.51% of the company's total share capital. This unpledging was completed between September 16-17, 2025.
Tongtech's stock recorded abnormal fluctuations, falling over 30% across two consecutive trading days (September 17-18, 2025), and has been under a delisting risk warning since September 15, 2025.