Dissecting Systematic Fraud: Motivations, Methods and Regulatory Implications of the Six-Year Financial Fraud in the Jin Tong Ling Case

Abstract

In recent years, frequent financial fraud incidents among listed companies have severely undermined the integrity foundation of the capital market and investor rights. Against this backdrop, the Jin Tong Ling company's financial fraud case, spanning six consecutive years, has emerged as one of the most notable financial fraud cases in recent times. Due to its prolonged duration, substantial fraudulent amounts, and concealed manipulation methods, it has become a primary subject for dissecting systematic fraud. This study employs the event study methodology, combined with the Fraud Triangle Theory, to conduct an in-depth analysis of the company's fraudulent techniques, motivations, and the consequences and impacts of the fraud. The company committed fraud through means such as fabricating Engineering, Procurement, and Construction (EPC) project progress and forging business documents. The motivations stemmed from delisting pressure and the dual failure of internal controls and auditing. This misconduct triggered severe consequences, including market value evaporation and criminal prosecution. The research conclusions emphasize that companies should strengthen internal control systems and introduce digital tools to track financial data; audit institutions must adhere to professional ethics; and investors need to remain vigilant against abnormal risk signals. This case provides critical implications for the governance of integrity in capital markets.