Ylz Information Technology Co., Ltd. (ST Ylz, stock code: 300096) has been formally penalized by regulators, opening the door for affected investors to seek compensation through civil litigation. The company received an administrative penalty decision notice on July 9, 2026, following an investigation by the Xiamen branch of the China Securities Regulatory Commission (CSRC).

The investigation uncovered four major categories of violations centered around the failure to disclose related-party transactions, guarantees, and litigation matters, along with substantial omissions in periodic reports. These actions have created significant legal exposure for the company and its former leadership.

The First Violation: Undisclosed Guarantees for Related Parties

The CSRC found that the company failed to promptly disclose guarantees provided for affiliated entities, with corresponding periodic reports containing material omissions. When Zhang Xi served as the controlling shareholder and actual controller, he privately utilized the company's name in October 2018 to guarantee a RMB 550 million loan obtained by Zhang Xi and his affiliate Beijing Jingfa Real Estate Development Co., Ltd. from Zhang Liyun. This guarantee amount represented 71.61% of the company's audited net assets for 2017, constituting a related-party guarantee.

In May and June 2020, Zhang Xi again privately used the company's name to reconfirm guarantees for the remaining debt balances of RMB 542 million and RMB 555 million, representing 62.02% and 63.52% of audited net assets for 2019 respectively. An arbitration ruling by the Beijing Arbitration Commission in August 2024 determined that the company bore no guarantee liability. However, these guarantees appeared in year-end balances from 2018 through 2022 and the 2023 semi-annual report, ranging from RMB 543 million to RMB 599 million and constituting between 58.94% and 179.65% of the company's disclosed net assets for those periods.

The Second Violation: Undisclosed Related-Party Borrowings

In February 2018, Zhang Xi privately borrowed RMB 60 million in the company's name from Suzhou Nuojin Investment Co., Ltd. due to personal funding shortfalls. The full amount was transferred directly to accounts controlled by Beijing Jingfa Real Estate. This borrowing constituted 8.06% of audited net assets from 2016, representing a non-operational occupation of funds by a related party. Zhang Xi repaid RMB 30 million in April 2018 and cleared the remaining balance in May 2023. These borrowings appeared in year-end balances from 2018 through 2022, constituting between 4.39% and 14.94% of disclosed net assets for those periods, yet remained undisclosed until November 28, 2023.

The Third Violation: Undisclosed Joint Borrowings with Related Parties

In March 2021, due to funding needs of Zhang Xi's sister Zhang Huafang, Zhang Xi and Zhang Huafang privately signed a joint borrowing agreement in the company's name, borrowing RMB 50 million from Gao Cai'e alongside other parties. The full amount was transferred directly to Zhang Huafang's account, constituting a related-party transaction representing 5.72% of 2019 audited net assets. A second-instance judgment from the Hangzhou Intermediate People's Court in August 2025 determined the company bore no repayment obligation. These joint borrowings appeared in year-end balances of RMB 52 million, RMB 54 million, and RMB 55 million for 2021, 2022, and the 2023 semi-annual report respectively, representing 6.70%, 13.65%, and 16.52% of disclosed net assets.

The Fourth Violation: Undisclosed Major Litigation and Arbitration

In February 2023, the Beijing Arbitration Commission accepted an arbitration application from Zhang Liyun seeking RMB 713 million in loan repayment and penalties from the company, with related documents sent to the company but concealed by Zhang Xi. In March 2023, the Suzhou Industrial Park People's Court accepted a civil lawsuit from Suzhou Nuojin seeking RMB 55.58 million, with documents similarly concealed. These matters involved amounts representing 92.10% and 99.28% of 2021 audited net assets respectively, totaling RMB 768 million. Combined amounts reached 230.52% of net assets disclosed in the 2023 semi-annual report, yet remained undisclosed until November 28, 2023.

Regulatory Actions and Penalties

Following the investigation, the Xiamen branch of the CSRC decided to issue warnings and impose fines on the company, Zhang Xi, and other responsible individuals. This formal penalty provides the legal foundation for investor claims, as previous regulatory steps included a listing investigation notice for Zhang Xi on November 30, 2023, and a company-level investigation notice on May 9, 2024. The company received its administrative penalty advance notice on June 13, 2026.

Investor Claim Eligibility and Procedures

According to the Civil Code, Securities Law, and Supreme People's Court judicial interpretations on false statement compensation, listed companies and responsible parties bear civil liability for investor losses caused by securities fraud, including price differences, commissions, stamp duties, and interest. Lawyer Song Yixin of Shanghai Hanlian Law Firm is now collecting claims from investors who purchased company securities between April 23, 2019, and November 27, 2023, and either sold or continued holding after November 28, 2023.

Important Legal Considerations for Claimants

The stated claim conditions remain subject to adjustment based on final regulatory conclusions and court judgments regarding timing, coverage, and calculation methods. While investors may file lawsuits directly since the administrative penalty precondition was eliminated, professional legal guidance suggests that administrative penalty decisions remain a necessary foundation for claims. The delisting status or bankruptcy proceedings of the company may affect litigation progress, and investors may choose whether to participate in representative actions. Claimants should prepare identification documents, securities account opening confirmations, and complete trading records stamped by their brokerage firms.

Lawyer Song Yixin has practiced since 1992 and serves as a partner at Shanghai Hanlian Law Firm, having provided legal services for over 10,000 securities litigation and shareholder dispute cases, while authoring numerous professional publications on securities law, civil compensation practices, and investor rights protection.