Less than three years after going public, hundreds of millions of yuan from Pawa Co., Ltd. were misappropriated by its actual controller.

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On September 7, ST Power (688184.SH) announced that one of its joint actual controllers and board member, Zhang Bao, had been arrested by the Zhuji City People’s Procuratorate on suspicion of embezzlement.

In response to this, ST Power confirmed to Xin Feng that Zhang Bao’s arrest was mainly related to embezzling funds from the listed company.

As of the end of August 2025, Zhang Bao had appropriated a total of 161 million yuan from ST Power.

This occurred less than three years after ST Power went public.

On September 15, 2022, ST Power was listed on the SSE STAR Market, but experienced a sharp downturn in performance in the year following its listing. In 2023, revenue was 954 million yuan, a year-on-year decline of more than 40%; during the same period, net losses reached 248 million yuan, a year-on-year decrease of more than twofold.

As a Zhejiang-based company, concerns about Zhang Bao’s special status preceded ST Power’s listing on the STAR Market.

As early as 2014, when ST Power was founded, Zhang Bao—then Party Secretary of the Youth League Committee and Party Secretary of the School of Metallurgy and Environment at Central South University, holding a deputy department-level position—held a stake in Power’s equity through shareholding arrangements under his wife Peng Chunli and his elder sister Zhang Mei.

This is clearly at odds with regulatory policies.

According to the 2010 “Ten Prohibitions on Integrity and Self-discipline for Leading Party Cadres of Centrally-administered Universities,” such cadres are not allowed to engage in commercial activities or run businesses in their own names or under others’ names.

Further, the 2016 “Several Provisions on Further Implementing the Central Eight-point Regulations in Colleges and Universities” states that, without approval, Party leading cadres in schools must not hold concurrent positions in social organizations, foundations, institutionally managed units, private non-enterprise units, or enterprises.

Possibly due to his identity at Central South University, in July 2018 Zhang Bao signed a “Leave of Absence for Entrepreneurship Agreement” with the university.

At that point, the equity previously held on behalf of others reverted to Zhang Bao personally, and he joined ST Power as director and general manager.

The SSE also raised questions about these issues during its inquiries.

“The issuer is asked to clarify whether Zhang Bao’s shareholding (or holding on behalf) in the issuer from 2014 to 2018 complied with the management regulations for college teachers/cadres,” the SSE pointed out.

In response, ST Power argued that although this did not comply with regulations on outside investment by Party leading cadres, it had obtained a “Confirmation Letter” from the relevant department at Central South University showing that no disciplinary action had been taken.

In 2021, Central South University retroactively confirmed awareness of Zhang Bao’s shareholding and stated that no major violations of laws or regulations were involved, nor had any disciplinary action been imposed on Zhang Bao or Peng Chunli.

Ultimately, ST Power successfully passed the review process for its IPO.

In fact, such cases of successful listing are rare.

Previously, Guangdong Baihe Medical Technology Co., Ltd. (“Baihe Medical”), another STAR Market IPO applicant, also encountered similar circumstances and ultimately withdrew its application.

Baihe Medical’s actual controller, Huang Kai, was only 19 years old when he founded the company. His father, Huang Weiguo, was then Deputy Mayor of Foshan, which raised regulatory concerns about whether Huang Kai was holding equity on behalf of his father.

At that time, the Foshan municipal government office issued a written reply, confirming they found no evidence of Huang Weiguo conducting business or violating relevant Party discipline or regulations on public officials and their children running businesses during his term as Deputy Mayor.

Although Baihe Medical later passed the listing committee’s review, it ultimately failed at the CSRC registration stage.

With Zhang Bao’s arrest for embezzlement, whether ST Power will ultimately be able to “recover the funds” successfully remains uncertain.

Risk Warning and DisclaimerThe market has risks, and investment should be cautious. This article does not constitute personal investment advice, nor does it take into account the special investment goals, financial situation, or needs of individual users. Users should consider whether any opinions, views, or conclusions in this article are suitable for their particular circumstances. Investments made accordingly are at your own risk. ```