Suda Co., Ltd.'s actual controller has been released from detention, and the stock price has fallen 11% over the past four days.

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On March 20, a disclosure posted by Suda Shares (001277) shows that the company’s actual controller has had the detention measure解除。

On that day, Suda Shares received a notice from the family of Li Xiyuan. The company received the 《Notice of解除 detention》 issued by the Supervision Commission of Bengshan District, Bengbu City. The Supervision Commission of Bengshan District, Bengbu City has解除 the detention measures against Li Xiyuan. At present, Li Xiyuan is able to perform the duties of Chairman of Suda Shares normally, and the company’s production and operating situation is normal.

Suda Shares is a specialized service company focused on full lifecycle management of mechanical equipment. Its registered address is in Zhengzhou, Henan Province. Li Xiyuan is the company’s actual controller and Chairman. The company’s business mainly centers on hydraulic support systems for coal mining comprehensive mechanized extraction equipment, providing integrated after-market services such as repair and remanufacturing for coal production enterprises, management of spare parts supply, and selling and renting second-hand equipment, and also providing fluid connection component products to equipment manufacturers.

On the evening of March 16, Suda Shares announced that it received a notice from the family of Li Xiyuan. It stated that on March 13, it received the 《Filing Notice》 and the 《Detention Notice》 for Li Xiyuan issued by the Supervision Commission of Bengshan District, Bengbu City, Anhui Province, indicating that Li Xiyuan had been detained. All other directors and senior management of Suda Shares are performing their duties normally, and the company has not received any investigation or cooperation documents from competent authorities. The progress and conclusions of the detention investigation are not yet known.

Although Suda Shares responded to the matter at once at the time, saying that the company has a sound governance structure and internal control mechanisms, its production and operating situation is normal, and the relevant matters will not have a significant impact on the company’s daily business activities, however, the day after the announcement about Li Xiyuan being detained was disclosed, Suda Shares’ share price still fell sharply by 8.41%, and as of today’s close, the company’s stock price has fallen for four consecutive sessions.

As of now, Suda Shares has completed its IPO listing for less than two years. According to Wind statistics, since the company’s listing, there has been only one incident related to violations and discipline this month alone, which led the Henan Securities Regulatory Bureau to take administrative supervisory management measures of issuing warning letters to the company, Li Xiyuan, General Manager Liu Runping, and Financial Controller and Board Secretary Xie Lizhi.

The Henan Securities Regulatory Bureau pointed out that Suda Shares used idle raised funds for cash management. The authorization validity period granted by the shareholders’ meeting runs until October 23, 2025. After the authorization expires, some cash management and wealth management products have not been redeemed, and the company continued to purchase wealth management products without deliberation and approval by the board of directors and did not disclose this. Li Xiyuan, Liu Runping, and Xie Lizhi are primarily responsible for the above violations.

At that time, Suda Shares stated that the company and the relevant personnel will seriously summarize and draw lessons, further strengthen their study and understanding of relevant laws and regulations and normative documents, enhance awareness of standardized operations, improve the level of corporate governance, strengthen information disclosure management, avoid similar incidents from happening again, earnestly safeguard the interests of the company and all its shareholders, and promote the company’s continuous, stable, and healthy development.

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