Twelve executives of Jiangsu Yabaite Technology Co, including the chairman, board members, supervisors and senior managers, have resigned, the company said in a statement sent to the Shenzhen Stock Exchange on Wednesday.
Another statement the same day warned investors and stakeholders about "abnormal fluctuations" in the share price since Friday. In the past three trading days, Yabaite's shares have declined more than 20 percent, the statement said.
The share dropped to 7.88 yuan (.19) on Wednesday.
Yabaite plans to make a public apology on Thursday. The company was penalized by the China Securities Regulatory Commission (CSRC) on Friday for fabricating a Pakistani transit project to pump up its revenue and profit.
During an investigation, the CSRC found that Yabaite had fabricated overseas projects and disclosed faked financial data in its annual reports, Chang Depeng, CSRC spokesperson, told reporters on Friday, finance.sina.com.cn reported on Wednesday.
The investigation showed that from 2015 to September 2016, Yabaite inflated its revenue and profit by 580 million yuan (.18 million) and 260 million yuan, respectively, by announcing non-existent transactions, such as a Multan metro bus project in Pakistan and other deals, the news report said.
The CSRC fined the company and its chairman 600,000 yuan and 300,000 yuan, respectively, which were the maximum amounts that the CSRC could impose for misconduct, the report said.
The agency also banned the management team from the stock market for periods ranging from three years to life.