Chinese shareholders of SMCP fined 1.7 million euros

Paris - Amidst an exceptional governance crisis, the Chinese shareholders of French fashion group SMCP (Sandro, Maje, Claudie Pierlot) were fined a total of 1.7 million euros by the French Financial Markets Authority (AMF), according to a statement released on Thursday, June 12, 2025.

"In its decision of June 10, 2025, the Sanctions Committee sanctioned SMCP shareholders for breaches of their declarative obligations and the dissemination of false or misleading information," according to an AMF statement.

"The Committee imposed sanctions of 400,000 euros on European TopSoho, 300,000 euros on Dynamic Treasure Group and one million euros on Chenran Qiu," all three linked to a complex financial arrangement, the statement specified.

SMCP and the mystery of the 16 percent

The majority shareholder of SMCP at the time of its initial public offering in 2017 was a Chinese conglomerate, Shandong Ruyi, via an investment vehicle registered in Luxembourg, European TopSoho.

However, heavily indebted, European TopSoho defaulted and in 2021 lost most of the capital to its creditors gathered within the entity GLAS. Today, GLAS holds 29 percent of SMCP's capital and would like to sell its shares to recover the money lent.

But European TopSoho had previously sold a 16 percent stake for 1 euro to the daughter of Shandong Ruyi's founder, Chenran Qiu, housed in the Dynamic Treasure Group trust in the British Virgin Islands.

Since then, the SMCP group has not known who owns this 16 percent of its capital, resulting from the sale of a block of 12 million shares in 2021.

"The Sanctions Committee first held that European TopSoho and Dynamic Treasure Group had disregarded their declarative obligations by failing to declare or by late declaration to the AMF and SMCP the crossing of thresholds for holding capital and voting rights in SMCP," the AMF explained in a statement.

"The Committee then considered that European TopSoho had committed market manipulation by disseminating false or misleading information."

European TopSoho stated by press release that its director, Chenran Qiu, was not a shareholder of Dynamic Treasure Group and that she did not control "in any way its business", which is false, continued the stock market watchdog.

"The issuer SMCP was sanctioned in the same procedure for a breach of a different nature, consisting of having failed to comply with its obligation to preserve the confidentiality of inside information," receiving a fine of 20,000 euros, the AMF communication continued.