"Victim" of the "Wuyang Bond" case Debon Securities: Under the tightening of financial marketing supervision, "traffic first" still wants to build a technology broker to fight for IPO again

On January 18, a message that "Shanghai AllBright Law Firm was subjected to a huge amount of 650 million yuan in joint and several liability compensation" was frantically swept away. As soon as the news came out, it immediately triggered a heated public discussion. According to the information learned by the author, Shanghai AllBright Law Firm subsequently clarified online that the matter required joint and several liability for the issuance of "Wuyang Bonds" bonds, and the amount of compensation was not 650 million yuan transmitted online, but 5% of the total amount.

This Oolong incident involved the previous sensational "Wuyang Debt" case. The number one "victim" of the case is none other than Debon Securities.

After the "Wuyang Bond" case, Debon Securities suffered heavy losses

The country's first corporate bond fraud issuance case," the "Wuyang Bond" case, came to an end in 2021.

In August 2017, Wuyang Construction was investigated by the China Securities Regulatory Commission. In November 2019, the CSRC ordered Debon Securities to make corrections, gave a warning, confiscated 18.57 million yuan of illegal gains, and imposed a fine of 550,000 yuan; and gave a warning to the project responsible persons Zhou Chengwei and Cao Rong, and imposed a fine of 250,000 yuan each to revoke the qualification of securities practitioners.

On December 31, 2020, the first instance judgment of the "Wuyang Bond" case was pronounced, and the court held that Wuyang Construction had defrauded the qualification for bond issuance by using false financial data, which constituted fraudulent issuance and misrepresentation, and should bear the liability for compensation for the losses of investors. At the same time, the bond underwriter Debon Securities and Daxin Accounting, which issued the audit report, did not perform their duties diligently, and there was a major fault in the issuance and transaction of the bonds involved in the case, and they should bear joint and several liability for the debts of Wuyang Construction.

In September 2021, the Zhejiang Provincial High People's Court rendered a second-instance judgment upholding the original judgment in the Wuyang Debt case. At the end of 2021, some investors in the "Wuyang Bond" case received a rejection ruling, and the Supreme People's Court rejected debon Securities' application for retrial.

At present, the amount of civil compensation in this case has reached 740 million yuan, which may become the largest amount of compensation in the history of Civil Compensation Litigation for Securities Fraud in China.

Since the thunderstorm of Wuyang bonds, debon securities' various businesses have been seriously injured.

In 2018, debon securities bond underwriting ranking fell sharply, and the amount of bond underwriting in that year was 87.638 billion yuan, falling to 20th. In 2019, the amount of bond underwriting shrank to 22.112 billion yuan, ranking 31st. In 2020, the bond underwriting amount was 35.365 billion yuan, and the ranking continued to fall to 44th.

At the same time, the investment banking business of Debon Securities has also been sluggish, and its performance has continued to decline. Wind data shows that from 2015 to 2020, the investment banking business revenue of Debon Securities was 835 million yuan, 677 million yuan, 374 million yuan, 172 million yuan, 242 million yuan and 181 million yuan, of which the business income in 2020 decreased by 78.32% compared with 2015. As of June 30, 2021, debon Securities' investment banking business revenue was only 28 million yuan.

Image source: wind data

In 2020, Debon Securities completed only 2 IPO projects, although it was better than 2019 (0 orders) and 2018 (1 order). In March 2021, Tibet Jincai Technology Co., Ltd. and Debon Securities terminated their IPO counseling cooperation, and on July 20, Zhejiang Dongyi New Energy Power Technology Co., Ltd. and Debon Securities terminated their IPO counseling cooperation.

Deppon system "traffic first" "Big V" and "Net Red" crazy diversion

At this time, the author noticed that Debon Securities has always been quite "alternative", and the market always pays attention to the company's "lace news". In addition to the high-profile "Wuyang Bond" case, debon Securities has recently caused another incident that has aroused heated discussion.

According to industry insiders, the traffic growth of Debon Securities only follows the principle of "traffic first", but ignores legal compliance. After the introduction of new regulations by the Securities Association, Debon Securities still cooperates with many financial Internet celebrities and KOLs to guide C-end users to open accounts, as the main means of drainage. The author contacted Debon Securities to inquire about its compliance risks, but did not get an effective answer.

As early as last November, the Securities and Fund Institution Supervision Department of the China Securities Regulatory Commission issued a circular regulating the cooperation between securities companies and "big V" to carry out online live broadcasts, customer diversion and other activities, and clarifying the corresponding regulatory requirements. Recently, the Shenzhen Securities Regulatory Bureau released the first issue of the "Securities and Futures Institutions Regulatory Newsletter" in 2022 to once again announce the wind direction warning of the cooperation between securities companies and big V. The Shenzhen Securities Regulatory Bureau stressed that the Internet "big V" is not a securities broker engaged in full-time securities brokerage business, and securities companies must not carry out relevant cooperation with the "big V" through drainage and other forms. It is understood that various securities companies have suspended cooperation with the financial big V. On the official account, many links to self-media diversion accounts have been removed. However, Debon Securities is still "maverick", still using this means to earn traffic and guide account opening.

In recent years, as the Internet has broken the geographical restrictions, especially some Internet brokers open accounts in a year equivalent to the amount of others in ten years, so other brokers have followed up with the Internet to obtain customers, and the sales department has become less and less, from the street storefront to the office building. A blogger mentioned in a tweet, "With the deepening of the Internet, the industry continues to roll in, and the price of basic services is becoming more and more transparent." Now brokers almost do not make money by the commissions and commissions generated by shareholder trading. Because this part of the profits were sold to the website platform and the Internet big V. "However, some Internet big Vs may not have the qualifications of investment advisers, and there are great compliance risks for securities companies to cooperate with them."

In addition, Debon Securities' strategy of respecting "traffic first" is not only reflected in this, the entire Debon system has been affected, and Debon Fund, a subsidiary of Debon Securities, has also practiced the drainage strategy of major shareholders. It is understood that Debon Fund has hired 3 Internet celebrity anchors to establish its own live broadcast team, including the former Caitong Asset Management well-known beauty anchor Hua Cai Sister, who is also trying to increase marketing channels through the Internet and catch up in the field of live broadcasting.

Fifteen years of unsuccessful listing in the dream of creating a technology broker to impact the IPO again

The market is also very controversial about Debon Securities and its IPO path.

Debon Securities' complex for listing seems to have long been "deeply rooted". As early as 2007, Fang Jiachun, then chairman of Debon Securities, publicly stated that he would fully promote the IPO work in 2007 and achieve a successful listing as soon as possible. Today, it seems that this nearly fifteen-year-old hope still has no bright whereabouts.

On July 6, 2021, Debon Securities issued an announcement that due to Debon Securities' decision to terminate the original stock issuance and listing plan, after friendly consultation between Debon Securities and Haitong Securities (600837), the two parties unanimously agreed to terminate the counseling on the initial public offering and listing of Debon Securities, and signed a termination agreement. Haitong Securities ceased to serve as the counseling agency of Debon Securities and terminated the relevant counseling work.

After the announcement was issued, a round of public opinion was immediately set off, and most of them were speculation that Debon Securities wanted to terminate the IPO, but Debon Securities did not let this speculation spread for a long time and urgently issued a statement through the media: "Debon Securities has not terminated the listing plan, the company will re-select the sponsoring agency to promote the listing work, and according to the company's strategic planning, submit a counseling filing registration application to the Shanghai Supervision Bureau of the China Securities Regulatory Commission in a timely manner." ”

The market's view of the IPO event of Debon Securities has become two factions, one faction believes that Haitong Securities has a problem, and the other faction believes that it is a problem of Debon Securities itself.

However, from the data point of view, Haitong Securities is not inferior in investment banking business. According to the data disclosed by Haitong Securities in 2020, the investment banking business income of Haitong Securities accounts for 6.05% of the total business revenue, which is the largest proportion of business. As of the first half of 2021, Haitong Securities' investment banking business ranked first among a number of securities companies, followed by CITIC Securities (600030), Guotai Junan, Ping An Securities, Orient Securities Underwriting And Sponsorship and CICC. Therefore, more people in the industry believe that the reason for debon securities to change securities companies may come from Debon Securities itself.

Debon Securities relies on the strong resources of the "Rejuvenation Department", but its performance has declined year after year, and the IPO has not been fruitful for more than ten years, which is really eye-catching. In the context of the entry of wholly foreign-owned securities companies and the impact of financial technology, the industry competition is gradually intensifying, and many leading securities companies even regard financial technology as "core competitiveness" to build, and the survival environment of small and medium-sized securities companies located in the waist is harsh. According to the author's understanding, in order to impact the IPO again, Debon Securities has recently followed the footsteps of the head brokerage to build a technology broker. However, under the model of copying the head brokerage, whether Debon Securities can be "reborn" and successfully transformed according to this can only be verified by the market.

In response to debon securities's "build a technology brokerage IPO listing" series of questions, the author once sent a formal interview letter to the company side of Debon Securities, but after waiting for 5 days, it failed, and contacting the market public relations department also failed to get an effective answer.