The "post-95" billionaire was fined 133 million yuan!
According to the administrative penalty decision recently announced on the official website of the China Securities Regulatory Commission, due to violations of restrictive provisions on the transfer of China Nuclear Titanium Dioxide (002145 SZ) 2023 non-public issuance of shares, illegal information disclosure and other violations of laws and regulations, Wang Zelong, the actual controller of China Nuclear Titanium Dioxide, and his friend Hong Haowei, Han Yuchen, the former secretary of the board of directors of China Nuclear Titanium Dioxide, CITIC Securities, Haitong Securities and CITIC CSI, were fined a total of 235 million yuan, of which Wang Zelong was fined 133 million yuan.
The picture is from the website of the China Securities Regulatory Commission
Wang Zelong. Data map
Cashed out 671 million yuan in 9 days
According to the China Securities Regulatory Commission, between September 2022 and February 2023, Wang Zelong conspired with CITIC China Securities Capital Management Co., Ltd. (hereinafter referred to as "CITIC CSI"), CITIC Securities Co., Ltd. (hereinafter referred to as "CITIC Securities"), Haitong Securities Co., Ltd. (hereinafter referred to as "Haitong Securities") and Han Yuchen, the former secretary of the board of directors of CNNC Titanium Dioxide, to implement the arbitrage business of private placement and securities lending. In addition, Wang Zelong also concealed his actual participation in the non-public offering, resulting in false records in the announcement of the listed company.
In July 2022, CNNC's application for non-public issuance of titanium dioxide shares was approved by the China Securities Regulatory Commission. However, at the same time, CITIC CSI recommended to Wang Zelong a fixed-plus-short arbitrage scheme, which allows clients to bypass the six-month lock-up period and settle their earnings in advance through an OTC derivatives trading platform.
In September 2022, Wang Zelong decided to implement the arbitrage plan, lending shares through the employee stock ownership plan of CNNC Titanium Dioxide, and conducting over-the-counter derivatives transactions with CITIC CSI in the name of an investment development company (hereinafter referred to as "A Investment Company"). However, due to the insufficient subscription funds of Investment Company A, Wang Zelong introduced Hong Haowei to join the arbitrage transaction in February 2023, and Hong Haowei participated in the name of a No. 1 private securities investment fund (hereinafter referred to as "No. 1 Fund").
From September 2022 to February 2023, Wang Zelong discussed and implemented a securities lending arbitrage business with Han Yuchen, CITIC CSI and CITIC Securities, involving the hedging of 88 million CNNC titanium dioxide shares. In addition, in November 2022, CITIC CSI and Haitong Securities communicated on the income swap business linked to the non-public offering of shares of CNNC Titanium Dioxide, which was approved by the compliance department and the risk management committee of CITIC CSI in December.
In February 2023, Haitong Securities participated in the first round of quotation for CNNC's titanium dioxide non-public offering and determined the issue price. Subsequently, Haitong Securities entered into a number of income swap agreements with CITIC CSI and other parties linked to CNNC titanium dioxide shares.
From February 6 to February 14, the 88 million shares of CNNC Titanium Dioxide held by the CNNC Titanium Employee Stock Ownership Plan were allocated to four private equity fund product accounts in accordance with the path designated by CITIC CSI, and the lending period was extended and renewed until September 2023 through the extension and repayment of the old by borrowing new ones.
From February 13 to February 21, four private equity fund product accounts sold 88 million shares of CNNC titanium dioxide, with an average selling price of about 7.63 yuan per share and a turnover of about 671 million yuan.
On March 9, China Nuclear Titanium Dioxide announced the listing of the non-public offering of shares, and the stock restriction period was until September 8. From March 17 to April 6, Investment Company A and Fund 1 applied to CITIC CSI for early termination of all long vanilla option contracts and short income swap contracts, and CITIC CSI closed the corresponding positions and settled them.
According to the administrative penalty letter of the China Securities Regulatory Commission, Wang Zelong made a profit of 58.16 million yuan through the investment company, Hong Haowei and Wang Zelong made a profit of 14.19 million yuan and 2.48 million yuan respectively through the No. 1 fund, CITIC China Securities did not actually make a profit, CITIC Securities securities lending business income was 1.91 million yuan, and Haitong Securities income exchange business income was 790,000 yuan.
A total of 235 million yuan was confiscated
After investigation, the CSRC believes that Wang Zelong and Hong Haowei actually participated in the non-public offering through the derivatives trading arrangement, and sold them at the market price, locking in the price difference between the discount price of the non-public offering of shares in advance, and circumventing the restriction period in disguise. At the same time, in the process of Hong Haowei's transfer of shares in violation of restrictive provisions, Wang Zelong participated in the negotiation of the arbitrage plan for increasing and financing securities, and contacted and suggested that Hong Haowei join the arbitrage. In addition, Wang Zelong, as the actual controller of CNNC Titanium Dioxide, concealed his actual participation in the non-public offering through a series of trading arrangements during the non-public issuance of shares by CNNC Titanium Dioxide in 2023, resulting in false records in the report on the issuance of A shares related to CNNC Titanium Dioxide's non-public issuance of A-shares, and the relevant acts constituted violations of laws and regulations such as the Securities Law.
At the same time, the China Securities Regulatory Commission said that CITIC CSI formulated an arbitrage plan, built a trading structure, and provided leveraged financial support for Wang Zelong and Hong Haowei's transfer of shares in violation of restrictive regulations; CITIC Securities understands that the purpose of securities lending is to provide securities lending services to customers with fixed increase arbitrage. Haitong Securities subscribed for the non-public issuance of shares of CNNC Titanium Dioxide in its own name in accordance with the quotation instructions of CITIC CSI, which objectively helped CITIC CSI and its customers to obtain stock returns, so that the arbitrage behavior of private placement could be realized; Han Yuchen came forward for Wang Zelong and others to implement the fixed increase arbitrage plan. The relevant acts of CITIC CSI, CITIC Securities, Haitong Securities, and Han Yuchen, together with Wang Zelong and Hong Haowei, constitute relevant violations of laws and regulations.
The China Securities Regulatory Commission plans to decide to order corrections, give warnings, and confiscate 77.53 million yuan of illegal gains, including 60.64 million yuan of Wang Zelong's illegal gains, of which 60.64 million yuan will be confiscated by Wang Zelong's illegal gains.
At the same time, Wang Zelong was fined 120 million yuan for the joint illegal act of transferring shares with CITIC CSI, CITIC Securities, Haitong Securities, and Han Yuchen in violation of the restrictive provisions, of which Wang Zelong was responsible for 60 million yuan, CITIC CSI 36 million yuan, CITIC Securities 18 million yuan, Haitong Securities 5.4 million yuan, and Han Yuchen 600,000 yuan, and imposed a fine of 35 million yuan on Hong Haowei and Wang Zelong, CITIC CSI, CITIC Securities, Haitong Securities, and Han Yuchen for the joint illegal act of transferring shares in violation of the restrictive provisions. Among them, Wang Zelong 10.5 million yuan, CITIC CSI 10.5 million yuan, Hong Haowei 7 million yuan, CITIC Securities 5.25 million yuan, Haitong Securities 1.575 million yuan, Han Yuchen 175,000 yuan.
In addition, in accordance with the provisions of the second paragraph of Article 197 of the Securities Law, Wang Zelong was fined 2 million yuan for illegal information disclosure.
In the end, the total amount of fines and confiscations was 235 million yuan, of which Wang Zelong was fined a total of 133 million yuan.
The post-95 actual controller is not self-made
It is reported that CNNC titanium dioxide is an industry leader in the production of titanium dioxide, a basic chemical raw material. Its main products are high-grade rutile titanium dioxide, which are widely used in coatings, plastics, rubber, inks, papermaking and other fields, and are known as "industrial monosodium glutamate".
In 2023, the revenue of China Nuclear Titanium Dioxide will be 4.947 billion yuan, a year-on-year decrease of 9.76%; the net profit attributable to the parent company was 419 million yuan, a year-on-year decrease of 34.84%; deducted non-net profit of 332 million yuan, a year-on-year decrease of 48.52%. Among them, about 87% of the company's revenue in 2023, 4.314 billion yuan will come from titanium dioxide business.
The picture is from CNNC's 2023 annual report
According to public information, Wang Zelong was born in Jieyang City, Guangdong Province in 1996 and graduated from Beijing Film Academy. According to media reports, as early as 2015, Wang Zelong, who had just become an adult, subscribed for 53 million shares of Longbai Group (002601 SZ), which is engaged in the production of titanium dioxide, for 1.431 billion yuan; After the expiration of the restriction period, he has reduced his holdings and cashed out 4 times, making a net profit of more than one billion.
In April 2021, Forbes recently announced the list of the world's youngest billionaires in 2021, and Wang Zelong ranked second with a net worth of 1.5 billion US dollars (equivalent to 10.8 billion yuan). On March 25 this year, the Hurun Research Institute released the "2024 Hurun Global Rich List", and Wang Zelong ranked 3,058th on the list with 7.2 billion yuan.
Wang Zelong has become the actual controller of CNNC titanium dioxide since 2019 after Li Jianfeng, once held 43.48% of the shares, and still holds 33.45% of the shares.
The picture is from CNNC's 2023 annual report
Wang Zelong once said in an exclusive interview with Forbes China that investing in Longbai Group was the first major financial investment decision made under the instruction of his father Wang Deliang. According to China Securities Journal and other media reports, Wang Deliang and his brother Wang Fuliang were born in Jieyang City, Guangdong Province, engaged in chemical trade in their early years, and then repeatedly invested in state-owned chemical listed companies through capital operation to achieve rapid arbitrage, known as "state-owned enterprise stock hunters". In 2016, due to the suspicion of "sitting in the bank" Guangzhou Automobile Group, Wang Deliang's Jiaolong Asset Management Co., Ltd. became the focus of market attention, and the China Securities Regulatory Commission also launched an investigation into the abnormal trading of GAC Group's shares at that time.
It is worth mentioning that China National Nuclear Corporation issued a message through the WeChat public account on April 14, noting that China Nuclear Titanium Dioxide was placed on file for investigation, and the statement stated that China Nuclear Titanium Dioxide and China Nuclear Group have no affiliation or equity relationship, nor do they have any investment, cooperation, business and other relationships, and all its actions have nothing to do with China Nuclear Group, and China Nuclear Group does not assume any obligations and responsibilities for any of its actions in accordance with the law.
The picture comes from the WeChat public account of CNNC