Jinjian Rice Industry, long billed as China’s first publicly listed grain company, has been ordered to correct past accounting missteps after a Hunan securities regulator found that a former subsidiary used circular, empty trades to improperly recognise revenue between 2020 and 2022.
The Hunan Securities Regulatory Bureau issued a decision on February 4 requiring the company to rectify disclosure and accounting errors and issued warning letters to four former senior executives, including the ex-chairman, the former CEO (who also acted as chairman), the vice-president who oversaw trade operations, and the former chief financial officer. The regulator found that the subsidiary’s transactions with one trading group and several counterparties lacked commercial substance and that some purchase arrangements were actually agency auctions for state reserve grain where price and risk resided with clients rather than the company.
The irregular transactions inflated Jinjian’s reported revenues by more than RMB 586 million across the three years, but they translated into only a few hundred thousand yuan of excess profit in aggregate because costs were recorded in tandem. The misstatements each year remained below 4% of the company’s annual revenue, a fact the regulator cited in imposing corrective measures rather than heavier sanctions.
Jinjian has already taken steps that the company says mitigate the underlying business risks. In 2024 it completed an asset swap with its controlling state shareholder to divest three trading companies — including the implicated Yingkou unit — and to bring in food-processing and research entities. Management framed the moves as a refocusing on grain and edible‑oil processing, away from merchant trading operations. Trade revenue consequently fell: by the third quarter of 2025 trading accounted for roughly RMB 165 million, or about 6.9% of nine‑month revenue, and overall revenue for the first three quarters of 2025 was RMB 2.373 billion, down 26.8% year‑on‑year.
The episode touches on questions of governance rather than material investor losses. Jinjian’s financial performance has been volatile; after two years of losses in 2021–22 it returned to marginal profitability in 2023 and remained thinly profitable into 2025. The regulator’s formal reprimand and the recording of the responsible executives in the securities‑market integrity archive carry reputational consequences for a company that also plays a symbolic role in China’s grain sector.
For foreign investors and observers, the case illustrates Beijing’s continuing emphasis on cleaning up accounting and disclosure practices at listed companies, including those that are state‑controlled. While the direct financial impact on Jinjian’s results is small, the action signals that regional regulators will hold management accountable for shoddy disclosures and that remedies can include structural changes — such as asset swaps with controlling shareholders — to realign business models with policy priorities.