Author | Zhang Liming
Edit| Gao Yan
Source | Unicorn Finance
On April 16 600898.SH, Soochow Securities Co., Ltd. (hereinafter referred to as "So 002118.SZ ochow Securities") (601555. SH) received a notice from the CSRC to file a case.
On April 17, Soochow Securities opened low in early trading and finally closed at 6.28 yuan per share, down 3.53% on the day. As of press time, Soochow Securities closed at 6.25 yuan per share, with a market value of 31.1 billion yuan.
Source: Canned Gallery
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Soochow Securities did not find any fraudulent issuance by listed companies
According to the information on the official website, Soochow Securities is the 18th listed securities company in the country, and has a securities service system with securities brokerage, asset management, investment banking services, investment services, and fund bond distribution services as the basic structure. Formerly known as Suzhou Securities. On December 12, 2011, Soochow Securities was listed on the Shanghai Stock Exchange.
ST Meixun was once a well-known communication equipment company in A-shares, and the actual controller of the company is Huang Guangyu, who has won the Hurun Report three times as the richest man in China, but the company has been subject to other risk warnings due to negative non-net profit deductions for three consecutive years and uncertainty about continuing operations.
According to ST Beauty's previous announcement, Soochow Securities is the sponsor of ST Beauty's non-public issuance of shares in 2020, and the continuous supervision period ends on December 31, 2022. During the period, Soochow Securities continued to supervise ST Meixun to fulfill its obligations such as standardized operation, keeping promises, and information disclosure.
According to the "Sponsor Summary Report" disclosed by Soochow Securities in May 2023, Soochow Securities believes that ST Meixun's information disclosure "does not contain false records, misleading statements or material omissions".
"Soochow Securities' Sponsorship Summary Report on ST Meixun's Non-public Offering of Shares" Source: Announcement of Listed Companies
However, according to the "Administrative Penalty Notice" received by ST Meixun on April 15, there were false records in ST Meixun's 2020 and 2021 annual reports, and the non-public issuance of shares in 2020 constituted a fraudulent issuance.
In addition, according to previous announcements, Soochow Securities served as the sponsor for the non-public offering of *ST Zixin in 2014, and the continuous supervision period ended on December 31, 2017, and *ST Zixin has been delisted from the Shenzhen Stock Exchange on August 4, 2023.
*ST Zixin (002118.SZ) was once the "king of ginseng" in A-shares, and since entering the ginseng industry in 2009, the company has hoarded a large number of ginseng raw materials and used it to develop the ginseng industry chain. However, with the collapse of ginseng prices and the sales of ginseng products falling short of expectations, the company has continued to deduct non-net losses since 2019.
*ST Zixin's financial fraud has lasted longer. According to the company's announcement on April 10 in the delisting section, the company's financial fraud lasted from 2013 to 2021, with a cumulative period of 9 years.
From 2013 to 2020, *ST Zixin failed to disclose related party transactions as required, resulting in suspected material omissions in the company's annual report; from 2014 to 2021, the company was suspected of inflating the procurement cost of forest ginseng to inflate inventory; from 2017 to 2018, the company inflated operating income and profits through fraud, including 94 million yuan in revenue and 85 million yuan in 2017, 200 million yuan in 2018, and 95 million yuan in 2018.
Earlier, in 2014, *ST Zixin also carried out a fixed increase. In this private placement, the company issued a total of 127 million shares, raising 1.600 billion yuan to supplement liquidity and repay bank loans.
However, as the sponsor of *ST Zixin's private placement, Soochow Securities did not find the above situation in the sponsorship process and the continuous supervision process afterwards.
"Soochow Securities' Summary Report on *ST Zixin's Continuous Supervision and Sponsorship Work" Source: Announcement of listed companies
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was complained by customers, and its insurance agency repeatedly received fines
In addition to the violations in sponsoring the above two private placement projects, Soochow Securities' investment banking business has also been repeatedly fined.
On January 23, the Shanghai Stock Exchange terminated its issuance and listing review due to the withdrawal of the application for issuance and listing of Jiangsu Sword Agrochemical Co., Ltd. (hereinafter referred to as "Sword Agrochemical") and its sponsor.
It is worth mentioning that the road to the IPO of Sword Agrochemical is very tortuous. Since 2015, the company has submitted several prospectuses, the most recent of which was in March 2023, and this voluntary withdrawal of the listing application also means that its IPO dream has broken down again.
On the way to the IPO, Sword Agrochemical was also issued a warning letter.
On April 21, 2020, the China Securities Regulatory Commission issued the "Decision on Administrative Supervision Measures" to the company, pointing out that in the process of the company's initial public offering and listing, there were problems such as abnormalities in the acquisition and endorsement of a large number of paper notes receivable, refunds and recovery of customers with the same bills, and failure to separate accounting of entrusted processing materials according to the processing unit.
The above behavior violated the relevant regulations, and the China Securities Regulatory Commission decided to take administrative supervision measures against Sword Agrochemical by issuing a warning letter.
Two sponsor representatives of Sword Agrochemical also received warning letters. The reason is that in the process of acting as the sponsor representative of Jiangsu Sword Agrochemical Co., Ltd. in the initial public offering and listing of shares, it failed to be diligent and conscientious, and the verification of the issuer's notes receivable and other matters was insufficient.
Source: The official website of the China Securities Regulatory Commission
Unicorn Financial found that since the beginning of the year, Soochow Securities has sponsored a total of 11 projects, and voluntarily withdrew 3 (the withdrawal rate was 27.27%), in addition to Sword Agrochemical, it also includes Kuaida Agrochemical and Jerrys.
Source: Oriental Fortune Choice
In addition, Soochow Securities was also "complained" by customers about the quality of practice. In December 2020, Jiangsu Hengxing New Material Technology Co., Ltd. (hereinafter referred to as "Hengxing Technology") submitted the GEM IPO application materials to the Shenzhen Stock Exchange under the sponsorship of Soochow Securities, but the application was "selected" for on-site inspection after just over 1 month, and then voluntarily terminated the IPO. In May 2023, Hengxing Technology was transferred to Guotai Junan (601211. SH) sponsor, in the first round of inquiries of the Shanghai Stock Exchange, asked Hengxing Technology to explain the actual reasons for the earlier withdrawal.
Hengxing Technology pointed the finger at Soochow Securities, bluntly saying that the latter asked to withdraw the application materials because he was worried about the quality of the work and was punished by the regulatory authorities.
"The former sponsor (i.e., Soochow Securities) was worried that the sponsor itself might face the risk of being punished by the regulatory authorities due to the quality of its work, taking into account the omissions of some related party transactions and other information in the application materials, and the lack of sufficient confidence in the quality of its work. Therefore, I communicated with the issuer many times and wanted to withdraw the materials. Hengxing Technology said.
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There are major flaws in the appointment process of Soochow Securities' INED,
Sponsoring a number of projects to "change face"
Soochow Securities' sponsorship project also has the problem of "changing face when it is listed".
According to the Red Star Capital Bureau, the penalty information published on the website of the AMAC shows that in January last year, the Listing Review Center of the Beijing Stock Exchange also imposed self-discipline penalties on Li Haining and Li Jun, two insurance agents of Soochow Securities, involving a Novi (834261. BJ) initial sponsorship project. Judging from the resume, these two insurance agents are both senior vice presidents of the Beijing headquarters of Soochow Securities Investment Bank. Yinovi was listed on the Beijing Stock Exchange in April last year, and its performance has "changed face" in less than a year, with revenue and net profit falling by 0.20% and 33.36% year-on-year in 2023, respectively.
In addition, several IPO sponsorship projects of Soochow Securities showed a situation where the project quality was not high, but the project was over-raised and the commission rate was high, and the performance "changed face" and broke on the first day.
For example, Tengya Seiko (301125. SZ), in the first year of listing, Tengya Seiko's revenue and profit began to decline, and its performance "changed face", and its net profit decreased by 32.07% year-on-year in the third quarter report of 2023. In this project, the sponsor commission rate of Soochow Securities is as high as 9.65%, which is higher than the market average of 5.19%, and higher than the average commission rate of 6.97% of the sponsor Soochow Securities' IPO underwriting project in 2022.
Jiahe Technology (872392. BJ) broke on the first day of listing, down 2.50% at the close, and its operating profit in the first year of listing fell by 3% year-on-year. In this project, the sponsor commission rate of Soochow Securities is as high as 8.10%, which is also higher than the market average.
Longyang Electronics (301389. SZ), Jianke Co., Ltd. (301115. SZ), Rongqi Technology (301360. SZ) and other IPO projects have also been over-raised and their performance has "changed face", with nearly 1.1 billion yuan, 782 million yuan and 566 million yuan over-raised respectively.
In addition to the change in the performance of the sponsorship project and the failure to be diligent in the sponsorship process, there were also major flaws in the brokerage's INED appointment process.
On February 23, Soochow Securities announced that it had received a fine from the Shanghai Stock Exchange. Yang Wei, the then secretary of the board of directors of Soochow Securities, was warned by the regulator.
The warning letter mentioned that Soochow Securities held a board meeting on December 13, 2023 to determine the candidates for independent directors, disclosed the notice of the general meeting of shareholders the next day, and held a general meeting of shareholders on December 29 of the same year to deliberate and approve the proposal to appoint independent directors. However, the Company failed to submit the relevant materials of the independent director candidates through the corporate business management system of the Shanghai Stock Exchange before the notice of the general meeting of shareholders for the election of independent directors was announced, that is, before December 14, 2023, and submitted the relevant materials for the independent director candidates until December 28 of the same year, and the supplementary submission was not completed until January 3, 2024, that is, after the general meeting of shareholders was held, after the Shanghai Stock Exchange requested the supplement, the filing time was significantly delayed, and there were major flaws in the appointment process.
Source: Announcement of listed companies
The SSE believes that Yang Wei, then secretary of the board of directors of Soochow Securities, as the specific person in charge of the company's information disclosure, failed to be diligent and responsible, and was responsible for the company's violations.
What do you think about the filing of Soochow Securities, and which fined brokerages do you pay attention to recently?