Another capital tycoon has fallen.

According to the latest announcement, renowned capital tycoon Lu Keping has received a "Case Filing Notice" from the China Securities Regulatory Commission (CSRC) for suspected violations of information disclosure regulations, prompting the CSRC to initiate an investigation.

Born in 1944, Lu Keping is now 80 years old. In 2020, his family was ranked 523rd on the Hurun Rich List with a net worth of 11 billion yuan. His "Sunshine Group" once dominated the scene, boasting four listed companies at its peak. However, as of now, three of these companies have exited the capital market, and the sole remaining one, Sihuan Bio-Technology, is teetering on the edge.

How did the once-mighty "Sunshine Group" come to this?

Lu Keping Under Investigation

On the evening of October 21, Sihuan Bio-Technology announced that its actual controller, Lu Keping, received a "Case Filing Notice" from the CSRC for suspected violations of information disclosure regulations, leading to the initiation of an investigation.

Sihuan Bio-Technology stated in the announcement that its production and operations remain normal and that it will closely monitor the progress of the matter, ensuring timely information disclosure in compliance with relevant laws and regulations.

Notably, Lu Keping is a well-known capital tycoon who has faced multiple investigations and penalties in recent years, marking a significant downfall.

On September 18, Sihuan Bio-Technology announced that Lu Keping and director Lu Yu received a prior notice of administrative penalties from the Guangdong Securities Regulatory Bureau due to suspected violations of information disclosure by VTRON.

According to the notice, the Guangdong bureau ordered Lu Keping to rectify the issues, issued a warning, and imposed a fine of 22 million yuan—5 million for information disclosure violations, 10 million for his role as the actual controller, and 7 million for his responsibility in the violations. Additionally, Lu Keping was banned from the securities market for life.

In October 2023, Lu Keping received a "Case Filing Notice" from the CSRC for suspected market manipulation, leading to a formal investigation.

Going back further to 2019, the CSRC issued a "Prior Notice of Administrative Penalties and Market Ban" to Sihuan Bio-Technology and Lu Keping for multiple violations, including false records of actual controller information from 2014 to 2018, failure to disclose related-party transactions in the 2014 annual report, and Lu Keping and his affiliates failing to report or announce as required.

The 11 Billion Yuan Capital Tycoon

Public records show that Lu Keping, born in 1944 and now 80, once controlled Jiangsu Sunshine and the delisted Hareon Solar, in addition to Sihuan Bio-Technology. His son, Lu Yu, was also penalized.

Looking back at Lu Keping's business journey, it’s hard not to sigh. From a leader in the wool textile industry to a "repeat offender" in the capital market, his downfall is perplexing.

As early as 2005, Lu Keping debuted on the Hurun Rich List with a net worth of 1.4 billion yuan, ranking 124th and earning the title "Textile Titan." In 2019, his family was listed with 9 billion yuan, and in 2020, they ranked 523rd with 11 billion yuan.

At its peak, Lu Keping's "Sunshine Group" had four listed companies: Hareon Solar, Jiangsu Sunshine, VTRON, and Sihuan Bio-Technology. Today, only Sihuan Bio-Technology remains, and it’s on shaky ground.

Founded in May 1992 and listed on the Shenzhen Stock Exchange in September 1993, Sihuan Bio-Technology primarily engages in biopharmaceutical production, sales, and landscaping projects. As of June 2024, it had 100,000 shareholders.

As Lu Keping’s troubles mount, Sihuan Bio-Technology’s operations have also deteriorated.

Financial reports show that from 2020 to 2023, its revenue dropped from 505 million yuan to 235 million yuan, with net profits turning into losses of 27.2951 million yuan, -34.7899 million yuan, -48.7928 million yuan, and -75.2698 million yuan, respectively. In the first half of 2024, it reported another net loss of 11.0581 million yuan.

From 2021 to the first half of 2024, cumulative net losses reached 158 million yuan.

Amid a series of negative developments, Sihuan Bio-Technology’s stock price has plummeted, hitting a low of 1.72 yuan per share in February this year. As of October 25, its market cap stood at just 2.759 billion yuan.

As the stock price collapses, Lu Keping’s control over Sihuan Bio-Technology is also at risk.

Disclosures show that as of September 27, Lu Keping held 30.85% of the company’s shares, with nearly 92% of them frozen.

Sihuan Bio-Technology stated that due to Lu Keping’s multiple debt disputes, if he fails to repay debts with assets other than his shares, the frozen shares could face enforcement actions like auctions, jeopardizing the company’s control.

The Fall of the "Sunshine Group"

Apart from Sihuan Bio-Technology, the delisting of the other three "Sunshine Group" companies is closely tied to Lu Keping.

On September 27, *ST VTRON was delisted due to falling below the par value threshold.

The saga began on September 20, 2023, when Xiling Energy signed an agreement with Lu Keping, making it the controlling shareholder and its actual controller, Liu Jungou, the new owner of VTRON. Less than a month later, Liu transferred 1.437 billion yuan from VTRON’s accounts, returning only 110 million yuan. The net outflow of 1.327 billion yuan was used to repay personal debts, constituting related-party fund misappropriation equal to 67.24% of VTRON’s net assets.

This led to VTRON’s failure to disclose its 2023 annual report and 2024 Q1 and half-year reports on time.

After the scandal broke, VTRON’s stock price nosedived, triggering the delisting rule.

In July 2024, Jiangsu Sunshine was delisted for falling below the par value threshold, with Lu Keping’s influence looming in the background.

On May 7, 2024, its controlling shareholder, Jiangsu Sunshine Group, received a "Prior Notice of Administrative Penalties" from the CSRC for alleged insider trading in Hareon Solar shares, facing a proposed fine of 232 million yuan.

The stock price subsequently collapsed, closing below 1 yuan for 20 consecutive trading days from May 16 to June 13, triggering delisting.

Even after delisting, the troubles continued. On July 10, the Shanghai Stock Exchange issued disciplinary actions against Sunshine Group, Lu Keping, and related parties for misappropriating 170 million yuan from the company.

The exchange stated that Sunshine Group and Lu Keping exploited their control to divert funds, severely compromising the company’s independence.

Clearly, the "Sunshine Group’s" downfall in the capital market is inextricably linked to its actual controller.