Once high-flying Chinese chip firm to delist from Shenzhen after financial fraud inquiry

Shares of Beijing Zuojiang Technology will cease trading in the Shenzhen Stock Exchange from July 26

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A bull statue in front of the Shenzhen Stock Exchange building. Photo: Bloomberg

Published: 7:00am, 1 Jul 2024Updated: 10:59am, 1 Jul 2024

Chinese chip firm Beijing Zuojiang Technology, which once touted its potential to rival Nvidia Corp, will be delisted from the Shenzhen Stock Exchange after being investigated for financial fraud, marking another cautionary tale in the country’s semiconductor industry.

In a regulatory filing on Friday, Zuojiang Technology said that its shares will cease trading in the Shenzhen bourse on July 26. This comes after the company was not able to present a clean audit report for its 2023 financial results, which prompted the Shenzhen Stock Exchange to move for its delisting.

Earlier this year, the China Securities Regulatory Commission (CSRC) said it found the 2023 financial disclosures of Zuojiang Technology to be “seriously untrue” and “suspected [the company] of significant financial fraud”.

The delisting notice sent shock waves across the Chinese investor community, which had pushed Zuojiang Technology’s stock to a high of 300 yuan (US$41.26) a year ago when the company was touted as a key player in China’s semiconductor self-sufficiency efforts. The stock closed at 6.94 yuan on April 26 before its trading was suspended.

The China Securities Regulatory Commission’s headquarters in Beijing. Photo: SCMP