Cui Wenjing, an intern reporter of this newspaper, reported from Beijing
On September 28, Haitong Securities received the Chongqing Securities Regulatory Bureau's "Advance Notice of Administrative Penalties" and issued an announcement that Haitong Securities was fined 4 million yuan; the two organizers involved were each fined 50,000 yuan.
Previously, on September 8, Haitong Securities was investigated by the China Securities Regulatory Commission for failing to exercise due diligence during its continuous supervision of the financial advisory business of Allred Optoelectronics Co., Ltd. (hereinafter referred to as "Allred").
This time, the Chongqing Securities Regulatory Bureau issued the "Advance Notice of Administrative Penalties", which means that the results of the investigation are released, and it is only 20 days before Haitong Securities was filed and investigated.
In the view of Chi Yihao (pseudonym), head of the investment bank of a head securities company, the results of the investigation came out faster than expected, but the punishment was also lighter than expected.
When Haitong Securities was investigated, many people in the industry speculated that its investment banking-related business qualifications may be restricted, and some customers of Haitong Securities Investment Bank intended to change the supervision brokers, and Chi Yihao also contacted two projects of Haitong Securities.
He told the "China Business Daily" reporter that the results of the investigation of this case filing were probably the final administrative punishment results. "The same thing is generally not punished twice, unless the CSRC believes that the Chongqing Securities Regulatory Bureau has imposed improper penalties, and it is unlikely that Haitong Securities' investment banking business qualifications will be affected in the future."
Fines and forfeitures of 4 million Investment banking business qualifications have not been affected
According to the announcement of Haitong Securities on the evening of September 28, the fine issued by the Chongqing Securities Regulatory Bureau against Haitong Securities for suspected unpaid supervision of Allred continuous supervision only included fines and did not involve investment banking business qualifications.
The announcement said: "Haitong Securities was ordered to make corrections, confiscate 1 million yuan of financial consulting business income, and impose a fine of 3 million yuan; Li and Jia were given warnings and fined 50,000 yuan each." Among them, Li Mou and Jia Moumou were the independent financial adviser sponsors and directly responsible supervisors of Allred continuous supervision period.
A number of interviewees told reporters that in the penalties of securities investment banks for failing to be diligent and conscientious as intermediaries of listed companies, the penalty of "no one penalty three" is a very basic punishment, and the fine issued to Haitong Securities this time is lighter than expected, which can be described as "heavy pick-up and gently falling".
"In particular, the qualification of investment banking business is not restricted, which is a great positive for Haitong Securities." The results of the investigation were released in only 20 days, and the speed was very fast. Chi Yihao told reporters, "After Haitong Securities was investigated, the market was worried that its investment banking business qualifications were affected, and some customers of Haitong Securities Investment Bank intended to change securities companies, and we were also following up on two of these projects, and we had not yet had time to take a big move." Now that the results of the investigation of the case are out, it may cause the willingness of Haitong Securities customers to change brokers. ”
However, Chi Yihao believes that due to the impact of the Allred case, the projects in which Haitong Securities serve as an intermediary will be strictly investigated in the future, and some projects that could have been fooled through are likely to be returned.
"In fact, Haitong Securities has not been restricted from investment banking business qualifications, and the penalties are not serious, largely because its problems are relatively not particularly excessive." Gao Qing (pseudonym), a veteran of investment banks, told reporters.
Specifically, the Advance Notice of Administrative Penalties lists the following issues of Haitong Securities:
"Haitong Securities, as the independent financial adviser of Southwest Pharmaceutical Co., Ltd. (now known as 'Allred') major asset restructuring and supporting fund raising projects, did not pay sufficient attention to all of Allred's illegal external guarantees in the process of implementing Allred's continuous supervision in 2017, only carried out procedures such as inquiring and inspecting the records of the 'three sessions' and the use of seal records, did not obtain the current Allred corporate credit report and saved it in the working paper of Allred continuous supervision, and did not conduct the necessary review and review of the current Allred corporate credit report." As a result, it was not found that Allred had provided guarantees in violation of the rules, and it could not be found that there were omissions in the disclosure of relevant information of Allred. ”
"Allred and its subsidiaries were involved in the violation of laws and regulations in private lending matters, and Haitong Securities did not maintain reasonable professional suspicions to fully verify and verify the private lending matters involved in Allred when Allred had announced that the company and its subsidiaries were involved in the litigation of the loan dispute, and only obtained internal evidence such as written statements issued by Allred's board of directors, did not obtain external objective evidence such as relevant loan contracts, complaints, and relevant legal documents of the court, and did not perform the work procedures for verification to third parties such as courts and lawyers representing the case." The failure to retrieve relevant case information through public channels such as the court trial open network led to the failure to find that Allred did not disclose its relevant major loan contracts in accordance with the law and the actual controller's occupation of Allred funds. ”
"Allred did not record the loan funds involved in the above-mentioned loan dispute in the financial books, its 2017 annual financial statements had false records, and did not perform the temporary information disclosure obligation in accordance with the relevant provisions of the law on major matters such as related loans, related party transactions that provided funds to controlling shareholders and actual controllers, and provided external guarantees in violation of regulations, nor did it disclose the above matters in the 2017 annual report." Haitong Securities failed to fully perform its continuous supervision obligations, was suspected of failing to exercise due diligence, and had false records in the 2017 Annual On-Site Inspection Report and the 2017 Continuous Supervision Opinion issued on May 2, 2018 and disclosed by Allred on May 4, 2018. ”
Gao Qing believes that the above problems of Haitong Securities mainly lie in the lack of diligence and responsibility, and for the violations of listed companies, Haitong Securities has the possibility of knowing, but the probability of fully knowing is relatively low, and the possibility of collusion with listed companies is even smaller. "For example, Ifrid violates the external guarantee, the relevant personnel of Haitong Securities are likely not to investigate." Generally speaking, if the customer's state is very bad, the relevant personnel know the seriousness of the problem and will hope that some things can be disclosed to prevent the fire from burning themselves. Not disclosing, most likely, is due to not realizing the seriousness of the problem, or even not knowing. ”
Insufficient investment in the continuous supervision period becomes a "common disease" of investment banks
It is worth noting that the above problems of Haitong Securities did not occur during the restructuring of Allred assets, but during the continuous supervision process. Gao Qing and Chi Yihao both believe that for securities companies, supervision is not a project to make money, but a follow-up responsibility, and the lack of energy invested by securities companies during the continuous supervision period is to a certain extent a "common disease" of investment banks. Investment banks often do not scrutinize listed companies until they have clearly declined. During this period, once a listed company has a problem and deliberately conceals it from the investment bank, it is often difficult for the investment bank to find out.
Gao Qing explained to reporters according to her own work practice: "During the continuous supervision period, in general, if the enterprise is in a normal state, the financial consultant sponsor often does not conduct a detailed investigation based on trust, only performs basic responsibilities, sometimes gets the basic draft, and even copies and copies the disclosure of the board of directors. If the company is already in poor shape and in turmoil, then the financial consultant sponsor should maintain professional prudence, increase vigilance, go to the site to verify more, do what should be done, be diligent and conscientious, and at least ensure that there is no problem in his letter. ”
Chi Yihao also believes that high-quality enterprises are more standardized, and there will generally be no problems during the continuous supervision period. There are usually two categories of problematic businesses. First, the major shareholders are too "willful", one out of the east and one out of the west, chaotic investment, resulting in problems in the enterprise. Second, there are problems in the enterprise itself and are going downhill, such as consecutive years of losses in performance, which are mostly old listed companies.
Chi Yihao stressed that not fully supervising listed companies to perform their temporary information disclosure obligations in a timely manner is a major problem for Haitong Securities. In practice, the information is not disclosed on time, and there are generally two possibilities. First, the securities company did not find out and did not know. Second, after the securities company found out, the enterprise did the work for the securities company, claiming that it could be disposed of as soon as possible, and asked the securities company not to disclose it.
"In our ongoing supervision, when a public company has a problem, it usually seeks our opinion on whether to disclose it. If we request disclosure, listed brokers will generally do so. Haitong Securities may not have consulted with the listed company, or after consultation, the enterprise insisted on its own views and did not do what Haitong Securities said, and Haitong Securities did not dare to overcomplicate it. Chi Yihao told reporters.
At the same time, he said bluntly that securities companies sometimes "release water" in order to take business in the continuous supervision period. "The listed enterprise may bring many related businesses in the future, and it is necessary to maintain good relationships. On the one hand, the company itself is likely to need to refinance, issue convertible bonds, etc., which requires investment banks to continue to follow up, the industry calls it 'one fish to eat more'. On the other hand, the industry has a circle, investment banks want to win the business, especially the local business, first need to integrate into the circle, 'boss introduce boss' is a good way. This is similar to the customer referral at the retail business end, the investment bank maintains a friendly relationship with the boss of the listed company, and the other party can help introduce other bosses such as the upstream and downstream of the enterprise, and the investment bank can use it to get more business. ”
Yin Yue (pseudonym), an executive of another securities company, believes that there are two possibilities for the occurrence of the above problems of Haitong Securities. First, the relevant personnel of Haitong Securities were negligent in their work and were not discovered. Second, the relevant personnel found out, but for various reasons did not want to fight with the listed company, and worried that once the matter was exposed, they would be severely punished by the regulator, so they performed some procedures instead of all procedures in the form, such as material acquisition is too indirect, in order to avoid regulatory penalties to a certain extent.
(Editor: Xia Xin Proofreader: Yan Jingning)