The sponsored project failed to be diligent and was involved in the illegal transfer of restricted shares, resulting in the suspension of the business sponsorship business qualification or the filing of the case for investigation. Due to the violation of the private placement business, a number of securities firms have recently been investigated or punished.
On the evening of April 16, Soochow Securities (601555. SH) announced that it was suspected of being convicted of Gome Communications (600898.SH), Zixin Pharmaceutical (002118. SZ, delisted) failed to be diligent and conscientious, and was filed by the CSRC.
Earlier, CITIC Securities (600030. SH, 6030.HK), Haitong Securities (600837. SH and 6837.HK) were also filed at the same time due to the illegal transfer of CNNC Titanium Dioxide (002145.SZ) 2023 private placement shares by relevant entities. On the same day, Huaxi Securities (002926. SZ) was also suspended from sponsorship for 6 months due to violations of the private placement business.
As the supervision continues to become stricter, the supervision of IPO and refinancing projects will continue to be strengthened. The new "National Nine Articles" put forward that it is necessary to strictly control the entry of issuance and listing, strictly check the review of refinancing, and at the same time strengthen the responsibility of the whole chain of issuance and listing, establish a "blacklist" system for intermediary institutions, and strictly investigate illegal issues such as fraudulent issuance.
Soochow Securities was investigated for financial fraud involving two companies
Soochow Securities announced that it received a notice of filing on the same day, and the China Securities Regulatory Commission (CSRC) filed a case against the company on April 8 on suspicion that Gome Communications and Zixin Pharmaceutical failed to be diligent in sponsoring the non-public issuance of shares.
According to public information, Zixin Pharmaceutical's latest private placement occurred in April 2016, with a total amount of about 1.6 billion yuan, and the raised funds were used to repay bank loans and replenish liquidity, with an issuance cost of about 33.25 million yuan, and the latest private placement of Gome Communications occurred in June 2021, with a total amount of about 166 million yuan, and the raised funds were used for the intelligent project of Jingmei Electronics' intelligent terminal production line. The construction project of the communication information platform, and the replenishment of working capital and repayment of bank loans, the issuance cost is about 6.63 million yuan, and the sponsor of the above two projects is Soochow Securities.
The case of Soochow Securities was filed, and the two listed companies involved in Gome Communications and Zixin Pharmaceutical were recently punished by the China Securities Regulatory Commission for suspected financial fraud or fraudulent issuance.
Among them, Zixin Pharmaceutical was investigated by the China Securities Regulatory Commission in January last year for financial fraud. From May to June last year, its stock price closed below 1 yuan for 20 consecutive trading days, and it was officially delisted in August last year.
Zixin Pharmaceutical announced on April 10 that the company received the "Prior Notice of Administrative Punishment and Market Ban" from the Jilin Securities Regulatory Bureau on April 8, and Zixin Pharmaceutical and 15 relevant persons in charge were fined a total of 35.87 million yuan for suspected violations of the letter disclosure, and the actual controller Guo Chunsheng was fined a lifetime ban on the securities market, and Zhang Hongfa, the person directly responsible for the illegal acts, was fined 10 years of securities market ban.
According to the investigation, Zixin Pharmaceutical Co., Ltd. purchased ginseng by nearly 6 billion yuan in 8 consecutive years, resulting in the company's failure to disclose non-operating capital transactions with related parties as required, which constituted a major omission. In addition, the company also inflated revenue and net profit by 294 million yuan and 180 million yuan in 2017 and 2018 respectively, and failed to disclose the company's illegal guarantees and major litigation matters as required.
Gome Communications disclosed on April 15 that the company and its 6 responsible persons were fined a total of 36.36 million yuan due to financial fraud in 2020 and 2021 and fraudulent issuance in 2020, and the then chairman Song Linlin, general manager Song Huohong, and financial director Guo Chen were all banned from the market for 10 years.
A number of securities firms were involved in private placement violations
In the past week, there have been many brokerages that have been filed and punished for violations involving private placement projects. In addition to Soochow Securities, Huaxi Securities is also known for its investment in Jin Tongling (300091. SZ) violated the rules in the private placement in 2019 and was suspended from sponsorship business for 6 months.
Huaxi Securities disclosed on April 12 that the company was suspected of failing to be diligent in due diligence in Jin Tongling's 2019 private placement sponsorship, and the relevant reports issued during the issuance of stock listing sponsorships to specific targets and the continuous supervision stage were suspected of false records, and the continuous supervision and on-site inspection work was suspected of not being implemented in place.
A number of relevant personnel of Huaxi Securities were punished by the Jiangsu Securities Regulatory Bureau, and it is planned to identify Liu Jingfang and Zhang Ran, the sponsor representatives of the above-mentioned projects, as unsuitable persons, and shall not hold the relevant positions of the securities company's securities issuance and listing sponsorship business or actually perform the above-mentioned duties within 2 years from the date of the decision on regulatory measures;
Due to financial fraud for 6 consecutive years, Jin Tongling was administratively punished by the China Securities Regulatory Commission in January this year, and the company and the relevant person in charge were fined a total of 5.7 million yuan. According to the investigation, from 2017 to 2022, the company inflated its revenue and profits by falsifying the progress confirmation form of the project image and invoices to adjust the completion progress (performance progress) of the EPC general contracting project, recognizing the revenue in advance without delivery, and not deducting the income from the return of sales.
According to public information, Jin Tongling's 2019 fixed increase project raised 800 million yuan, which was used to repay bank loans and replenish liquidity.
In addition, on the evening of April 12, CITIC Securities and Haitong Securities announced at the same time that on March 13, the China Securities Regulatory Commission decided to file a case against them due to suspected violations of laws and regulations in the process of transferring CNNC titanium dioxide's non-public issuance of shares in 2023 in violation of restrictive provisions by relevant entities.
China Nuclear Titanium Dioxide also disclosed on the same day that Wang Zelong, the actual controller of the company, was investigated by the China Securities Regulatory Commission on suspicion of violating restrictive provisions by transferring China Nuclear Titanium Dioxide's non-public issuance of shares in 2023 and illegal information disclosure.
As of the end of the third quarter of 2023, Wang Zelong held 1.295 billion shares of CNNC titanium dioxide, of which 671 million shares were restricted shares, with a shareholding ratio of 33.45%, and the above 671 million restricted shares were lifted on October 17 last year. As of the end of 2023, Wang Zelong still holds 1.295 billion unrestricted shares of China Nuclear Titanium Dioxide, with a shareholding ratio of 33.45%.
According to public information, China Nuclear Titanium Dioxide will issue A shares to specific targets in March 2023, raising a total of 5.288 billion yuan and an issue price of 5.92 yuan, and the raised funds will be used for recycled titanium dioxide deep processing projects, water-soluble monoammonium phosphate (water-soluble fertilizer) resource recycling projects, iron phosphate projects with an annual output of 500,000 tons and supplementary working capital.
CITIC Securities is the sponsor of the project, and Haitong Securities is one of the 16 subscription targets of the project, with a subscription amount of 547 million yuan. As of the first half of 2023, Haitong Securities ranked fourth among the top 10 shareholders of CNNC Titanium Dioxide, with a shareholding ratio of 2.39%.
(This article is from Yicai)