ST Silver River (300020) Plunges 8.6% as Regulators Launch Second Investigation

ST Silver River (300020) announced on July 9 that both the company and its controlling shareholder, Yinjiang Technology Group, received formal investigation notices from China’s Securities Regulatory Commission for alleged information disclosure violations. The stock dropped 8.6% to 3.19 yuan on July 10. This marks the second regulatory probe in two years for the once-celebrated smart city pioneer, which has seen its stock price collapse 93% from its 2015 peak of 47.2 yuan.

Why the second investigation matters

The July 9 investigation notice expands scrutiny beyond the company to its controlling shareholder, signaling regulators are conducting a deeper review of the entire disclosure chain. This follows a 2025 April administrative penalty in which the company admitted to hiding related-party guarantees across six years of annual reports and fabricating profits. The company also faces three overlapping risk warnings as of July 10.

Mounting financial and compliance failures

ST Silver River reported cumulative net losses of 3.006 billion yuan from 2023 to 2025, with annual losses widening from 236 million yuan in 2023 to 1.789 billion yuan in 2025. Revenue collapsed 85% from 1.169 billion yuan in 2023 to 175 million yuan in 2025. In Q1 2026, revenue fell 14.83% year-over-year to 51.33 million yuan. The company also carries 236 million yuan in unresolved illegal related-party guarantee obligations that remain outstanding since 2018.

Auditor and control structure under fire

In January 2026, regulators penalized Zhongxing Hua accounting firm for issuing false audit reports for 2021 and 2022, citing failure to exercise due diligence. Separately, the company’s actual controller, Wang Hui, delegated voting rights to a third party in late 2024 to repay company funds he had occupied. This arrangement triggered regulatory warnings after the parties failed to disclose the deal and later clashed over its validity.

Investor losses and compensation framework

About 26,000 shareholders remain trapped in the stock as of Q1 2026. Based on regulatory findings and the new investigation, investors who bought between specific windows and held through disclosure dates may qualify for compensation. Three compensation windows have been identified: purchases between August 29, 2023 and April 29, 2024; April 19, 2019 and September 13, 2024; or any purchase before July 9, 2026 with losses after July 10, 2026.

Final Thoughts

ST Silver River’s second investigation signals regulators are pursuing accountability across the entire disclosure chain, from the company to its controlling shareholder to its auditor. With 93% losses from peak, mounting financial deterioration, and unresolved compliance issues, the stock faces an uncertain path forward pending investigation outcomes.

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