Regulatory Shot! ST Beiwen and many people were punished, involving many film and television dramas such as "Ghost of Qiannu"

ST Beiwen (000802) announced on the evening of November 2 that on November 2, the company received the "Administrative Penalty Decision" and "Market Prohibition Decision" issued by the Beijing Securities Regulatory Bureau. ST Beiwen's suspected illegal information disclosure case has been investigated by the Beijing Securities Regulatory Bureau. Beijing Culture was given a warning and fined 600,000 yuan, and Lou Xiaoxi, then vice chairman of Beijing Culture, was banned from the securities market for 3 years.

Receive a fine for financial fraud

Looking back on the previous situation, ST Beiwen received the "Notice of Investigation" from the China Securities Regulatory Commission on December 31, 2020, and decided to file an investigation against the company in accordance with the relevant provisions of the Securities Law of the People's Republic of China due to the company's suspected violation of laws and regulations on information disclosure. On August 27, 2021, the Company received the Advance Notice of Administrative Penalties and Market Prohibition from the Beijing Securities Regulatory Bureau.

On August 27, 2021, the China Securities Regulatory Commission (CSRC) also specifically notified the conclusion of the investigation of ST Beiwen's suspected information disclosure violation case.

According to the latest announcement disclosed by ST Beiwen, after the regulatory authorities found that st Beiwen had illegal facts, including: In July 2018, ST Beiwen subsidiary Century Partners transferred 15% of the investment share income right of the film and television drama "Great Song Palace Words" to Haining Borun for 108 million yuan. In January 2019, Haining Borun paid the first transfer fee of 23 million yuan to Century Partners. The business recognized revenue of RMB102 million in Beijing Culture's 2018 annual report.

Century Partners signed a "Project Transfer Agreement" with Yagat, and Century Partners transferred 60% of the investment share income right of the film and television drama "Qiannu Ghost" to Yagaot for 380 million yuan. The agreement is shown to have been signed on December 10, 2018, when in fact the agreement was not signed in 2018. In March 2019, Argett paid the first transfer fee of 55 million yuan to Century Partners. The business recognized revenue of $358 million in ST Beiwen's 2018 annual report.

After investigation, the transfer of the right to the investment share income of "Great Song Palace Words" and "Qiannu Ghost" did not really occur, and the transaction funds were provided by Zhoushan Jiawen Xile Equity Investment Partnership (Limited Partnership) authorized by Lou Xiaoxi, authorized by ST Beiwen. Lou Xiaoxi arranged, organized and implemented the above-mentioned false transfer of the right to the income of investment shares, fictitious capital circulation, and flowed back to Century Partners.

Century Partners falsely transferred the right to the investment share income of "Great Song Palace Words" and "Qiannu Ghost", resulting in ST Beiwen inflating a total of 460 million yuan in the 2018 annual report, accounting for 38.20% of the current operating income (before retrospective adjustment), and inflating the net profit of 191 million yuan, accounting for 58.94% of the net profit of the current period (before retrospective adjustment). ST Beiwen's 2018 annual report contains false records.

Pursuant to the first paragraph of Article 193 of the 2005 Securities Law, the Beijing Securities Regulatory Bureau decided: First, give a warning to Beijing Culture and impose a fine of 600,000 yuan; second, give a warning to Lou Xiaoxi, Song Ge, Zhang Yunlong and other relevant responsible persons and impose fines ranging from 30,000 yuan to 300,000 yuan; third, Lou Xiaoxi was sentenced to a three-year ban on the securities market.

It is worth noting that st beiwen's announcement shows that Lou Xiaoxi and his agents proposed in the hearing and statement defense that ST beiwen was a systematic financial fraud, and that he was only aware of and assisted in the execution, not the top decision-maker, and should not be identified as the supervisor directly responsible for organizing and implementing the fraud, and Chen Ying was only an assistant executor who did not understand the whole picture. Second, Lou Xiaoxi himself is a real-name whistleblower of FINANCIAL fraud in ST Beiwen. In summary, a lighter punishment is requested, and a heavier punishment is imposed on the other main responsible persons in this case.

Lou Xiaoxi was the vice chairman of ST Beiwen and the chairman of Century Partners.

The first batch of ST Beiwen shareholder claims have previously been accepted by the court

Xie Liang, a lawyer at Guangdong Huanyu Jingmao Law Firm, said that according to the law, investors who meet certain conditions have the right to file a claim lawsuit because of st Beiwen financial fraud. Specifically, investors whose interests in the net purchase of ST Beiwen shares between March 22, 2019 and April 28, 2020 are initially expected to be eligible to participate in the claim (the final claim conditions are still subject to the court's determination).

"At present, a number of investors have entrusted us to prepare for the lawsuit, and investors have lost tens of thousands to millions of dollars." Lawyer Xie Liang told the Securities Times.e company reporter.

Zang Xiaoli, a lawyer at Beijing Shixuan Law Firm, introduced to the Securities Times reporter.e company reporter that before the official fine was issued, the Beijing Financial Court had issued the "Notice of Acceptance of the Case" and the "Notice of Payment of Litigation Fees" to the 5 plaintiffs of the ST Beiwen Investor Claim Case, which was also the first batch of ST Beiwen Investor Claim Cases that officially entered the litigation procedure.

On September 3, Liu Guixiang, vice ministerial-level full-time member of the Adjudication Committee of the Supreme People's Court, said at the "Fourth Small and Medium-sized Investors Service Forum" that the Supreme People's Court will formulate normative documents to improve judicial rules for investor protection, including plans to issue minutes of financial trial forums before the end of the year, and complete the revision of judicial interpretations on securities misrepresentation.

Lawyer Zang Xiaoli said that in fact, in practice, courts have quietly begun to implement the "unpunished pre-trial" model, and are gradually relaxing the acceptance conditions for investor claims and lawsuits, and ST Beiwen is one of them.

"We urgently hope that 'pre-trial without penalties' will become the norm as soon as possible, rather than a breakthrough in a few cases." Lawyer Zang Xiaoli said that at the same time, he also hopes that the judicial interpretation of securities fraud cases such as false statements, insider trading, and market manipulation will be improved as soon as possible. In fact, in the view of many securities rights lawyers, the abolition of the pre-punishment procedure should be the trend of the times.

(Editor-in-Charge: Peng Bo)