Changzhou Xingyu Automotive Lighting Systems Co., Ltd. has imposed disciplinary measures on senior executives after a dispute involving more than 100 university graduates hired shortly before the company sought their resignations escalated into a labor, supply-chain and capital-market issue. The company’s executive office ordered general manager and founder Zhou Xiaoping to forfeit 12 months of salary, removed deputy general manager Li Shujun from human resources and imposed a six-month pay forfeiture, dismissed HR director Yu Zhiming, and demoted and reassigned HR department head Li Mei. The decision, Xingyu Document (2026) No. (007), took effect immediately. Based on 2025 compensation disclosed by Xingyu Automotive Lighting Systems (601799.SS), Zhou’s forfeiture is about 1.1 million yuan, while Li’s is about 375,000 yuan. Yu received 540,000 yuan in pre-tax compensation in 2025 and had already left the board. The dispute centers on 107 of 140 graduates who negotiated with HR in early August, roughly a month after joining, after Xingyu had signed tripartite agreements with 440 members of the class of 2026; 372 later formed formal employment relationships with the company. Affected graduates said they were offered half a month’s salary to resign for personal reasons or face reassignment to assembly-line work at ordinary-worker pay. The Changzhou Municipal Human Resources and Social Security Bureau criticized the negotiations on August 25, while the company apologized on August 27 and offered subsidies, expense reimbursements and potential wage support. Zhou apologized at a September 2 earnings briefing, but questions over the suspended HR director’s identity persisted until the September 6 disciplinary document named Yu. The graduates submitted evidence to the Hong Kong Stock Exchange and the supply-chain compliance systems of BMW, Mercedes-Benz and Volkswagen. Mercedes-Benz opened a serious supplier ethics and labor misconduct investigation, Volkswagen China launched a special investigation, and BMW began communication and verification. The Hong Kong Stock Exchange had not disclosed its review status as of press time. The controversy emerged about 10 days after Xingyu filed its second Hong Kong listing application on July 29, and professionals said it could make a near-term listing unlikely. Xingyu’s shares had fallen more than 10% cumulatively since the incident by September 4 and were nearly half their 2026 peak. The dispute also coincides with weaker performance, rising receivables and a sharp increase in outsourced labor as the automotive supply chain faces price-war pressure. The company said it would strengthen human-resources management, employee protections and external oversight, and establish the Xingyu Youth Growth Fund. By noon on September 7, 71 affected graduates had found jobs, 22 had received offers after passing interviews, and 14 remained in interviews, seeking work or planning further study.