(Yicai Global) March 15 -- Chinese chemical materials maker Guangdong Rongtai Industry and certain members of staff have been slapped with a combined CNY15 million (USD2.3 million) fine for cooking the books, becoming the first in the country to be liable for penalties up to 16 times higher than previously after much stricter regulations came into effect last year.

Rongtai Industry stands accused of submitting its 2019 financial report late, failing to declare its association with four suppliers and inflating its 2018 and 2019 profits by CNY12.2 million (USD1.9 million) and CNY43 million respectively, the Jieyang, southeastern Guangdong province-based firm said on March 13.

The China Securities Regulatory Commission’s Guangdong branch levied a CNY3 million (USD461,000) fine on the company, ordered Chairman Yang Baosheng to pay CNY3.3 million for his role in the cover up and banned him from the securities market for the next three years. Chief Financial Officer Zheng Chuangjia was penalized CNY1.6 million and a number of other staff members received fines of between CNY200,000 (USD30,750) and CNY800,000 each.

Previously, the maximum fine for false information disclosure for an enterprise was CNY600,000 (USD92,246) and for people involved CNY300,000. However, since March 1 last year, regulators hiked penalties substantially to CNY10 million for both the enterprise and perpetrators to crack down on fraud.

Shares of Rongtai Industry [SHA:600589] closed down 5.74 percent at CNY2.79 (USD0.43) today.

Editor: Kim Taylor