A-share facing the regulatory storm: ST-share chairmen detained in hard-hit areas

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 A-share facing the regulatory storm: ST-share chairmen detained in hard-hit areas


According to incomplete statistics of Pengchao journalists, since July, six listed companies have been punished by the SFC or the chairman of the board has been taken compulsory measures, of which five are ST shares.

Specifically, * ST Kang De (Kang Dexin, 002450) was punished by the SFC. Chairman Zhong Yu had taken criminal compulsory measures earlier.

* ST Pengqi (600614) has violated the rules of fund occupation. Chairman Zhang Pengqi was detained for the crime of insider trading and disclosure of insider information.

ST Tianbao (002220) Chairman Huang Zuoqing was detained on suspicion of false invoicing.

Zhangzidao (002069) was fined for financial fraud and the chairman was banned from entering the market for life.

ST Fugang (600399) was fined for false information disclosure. Three current chairmen and two current general managers were banned from the market for life.

ST Tiancheng (600112) announces that there is a violation of funds occupation.

Among them, ST Kangde has the highest market attention.

On July 5, the SFC wrote that Kangde Xin had increased its profits by 11.9 billion yuan from 2015 to 2018. It was also suspected of failing to disclose in relevant annual reports the related transactions of non-operating funds occupied by controlling shareholders, providing guarantees for controlling shareholders, and failing to disclose truthfully the use of raised funds.

The Securities Regulatory Commission (SFC) uses the term long duration, huge amount of money involved, extremely bad means, especially serious violations to describe Kangdesins information disclosure violations, and announces that it intends to impose qualified penalties on Kangdesin and its main responsible personnel and take measures to prohibit the entry of the securities market for life. Next, those suspected of committing crimes shall be transferred to the judicial organs for investigation of criminal responsibility in strict accordance with the relevant provisions.

* ST Kangdes shares have been suspended since July 8, while its chairman, actual controller and major shareholder, Zhong Yu, has been taken criminal coercive measures by the police on May 12 for suspected crimes.

In addition to * ST Kangde, there are a number of ST shares related to capital occupation, including the companys chairman was detained criminally.

On July 9, * ST Pengqi issued a public announcement revealing that Zhang Pengqi, the actual controller and chairman of the board, was detained by Lishui Public Security Bureau of Zhejiang Province on suspicion of insider trading and disclosure of insider information and was temporarily unable to perform his duties.

On the same day, * ST Pengqi responded to the previous letter issued by the Shanghai Stock Exchange on the supervision of the occupancy of funds by the actual controllers of Pengqi Science and Technology Development Co., Ltd., which disclosed that Zhang Pengqi had occupied a total of 747 million yuan of funds by way of third-party payment entrusted by Luoyang Pengqi Industry, in addition, Zhang Pengqi and Its concerted actors violated the decision-making procedure and provided guarantees to the outside world. The remaining amount of guarantees violated the rules totaled 209 million yuan.

The announcement issued on July 8 shows that as of the announcement date, the total amount of funds occupied by the company is 33.3995 million yuan, and the total amount of illegal guarantees is 395 million yuan.

The announcement discloses that the controlling shareholders of the company need to borrow money in the name of the listed company because of capital turnover, which constitutes capital occupation. Wang Guosheng, then chairman of the board, and Zhu Hongbin, the current chairman, are mainly responsible for the occurrence of this violation.

Capital occupation is only one of the common violations of listed companies.

Information disclosure violations, false records of financial reports... They are all targets of recent severe crackdowns by regulators.

In the evening announcement of 10 July, Swertia Island said that it had received the prior notice of administrative penalty and market ban from the China Securities Regulatory Commission. After being ascertained by the Securities Regulatory Commission, the company had three violations.

Firstly, suspected of financial fraud, there are major defects in internal control. The annual report for 2016, the annual report for 2017, the announcement on the final inventory of the bottom-sown shrimp scallops in 2017 and the announcement on the write-off of assets and the preparation for the reduction of inventory prices are suspected of false records. Secondly, the announcement about the results of sampling shrimp scallops planted at the end of autumn 2017 was suspected of false records. Third, the suspected failure to disclose information in time.

The SFC decided to warn Swertia Island Group Co., Ltd. and impose a fine of 600,000 yuan. Chairman Wu Hougang was banned from entering the market for life.

ST Fugang was also fined for financial fraud, false records and other irregularities.

ST Fushan Iron and Steel Co., Ltd. announced in its announcement on July 8 that the company had received the Administrative Penalty and Prior Notice of Market Imprisonment from the CSRC. The fact that the CSRC found out that Fushun Special Steel was suspected of breaking the law included the following.

Firstly, the final inventory balance disclosed in Fushun Special Steels annual report from 2010 to 2016 and the third quarter report of 2017 is falsely recorded. Secondly, there are false records in the final construction balance disclosed in Fushun Special Steels annual report from 2013 to 2014. Thirdly, the final fixed assets balance disclosed in Fushun Special Steels annual reports for 2013 and 2015 has false records. Fourthly, the depreciation data of fixed assets disclosed in Fushun Special Steels annual report from 2014 to 2016 and the third quarter report of 2017 are false records. Fifth, there are false records of the main business cost data disclosed in the annual report of Fushun Special Steel from 2010 to 2016 and the third quarter report of 2017. Sixth, there are false records of the total profit data disclosed in Fushun Special Steels annual report from 2010 to 2016 and the third quarter report of 2017.

The Securities Regulatory Commission (SFC) said that for many years from 2010 to 2017, Fushun Special Steel has committed illegal acts with false records in information disclosure. The illegal acts lasted for a long time, the means were particularly bad, the amount involved was particularly huge, seriously disrupting the market order and causing serious social impact, resulting in a particularly serious damage to the interests of investors.

Finally, the SFC decided to give a warning to Fushun Special Steel Co., Ltd. and impose a fine of 600,000 yuan; three then chairmen, Zhao Mingyuan, directors, Sun Qi, and two then general managers, Zhang Xiaojun and Shan Zhiqiang, were all sentenced to life imprisonment in the market by the SFC; several relevant responsible persons were given a warning. They are also fined.

Another ST company is still at the stage of investigation by the SFC, but its chairman has been detained.

ST Tianbao announced on July 4 that recently, Huang Zuoqing, chairman of the board, and Sun Shuling, chief financial officer, were detained by the economic investigation detachment team of Dalian Public Security Bureau of Liaoning Province on suspicion of false invoicing.

Earlier on May 22, the company announced that on May 21, 2019, it received the Notice of Investigation on Filing from the China Securities Regulatory Commission, and decided to investigate the company for its suspected information disclosure violations.

It can be seen that the SFCs supervision of listed companies is still in a momentum of thunder.

In June, the Securities Regulatory Commission (SFC) published an article that listed companiesinformation disclosure violations take various forms and motivations. Relevant subjects lack respect for the market, the law, the profession and investors. They frequently test the legal bottom line and expose that the ecological environment of capital market is still unsatisfactory and needs to be improved urgently.

From 2016 to 2018, the SFC punished 170 illegal cases of information disclosure of listed companies with a total amount of fines of 201.61 million yuan and a total of 80 persons banned from the market. The objects of accountability involved more than 1202 persons of Dong Jianggao, major shareholders and actual controllers. A total of 113 persons responsible were fined and punished with top-notch fines to the public security. The organs transferred 19 suspected criminal cases and actively supported the peoples courts in hearing civil compensation cases for false statements, which formed a strong deterrent to the illegal acts of information disclosure of listed companies. Next, the SFC will continue to strengthen the enforcement of the illegal acts of information disclosure of listed companies, so as to encourage listed companies and major shareholders to tell the truth, make true accounts, make timely speeches, firmly adhere to the four bottom lines, not disclose false information, not engage in insider trading, not manipulate stock prices, and not harm the interests of listed companies. All kinds of intermediaries are responsible, purifying the market ecology, striving to improve the quality of listed companies, consolidating the basic plate of the real economy, and escorting the construction of a standardized, transparent, open, dynamic and resilient capital market. Source of this article: Peng Mei News Responsible Editor: Youyuan Garden_NO4712

From 2016 to 2018, the SFC punished 170 illegal cases of information disclosure of listed companies with a total amount of fines of 201.61 million yuan and a total of 80 persons banned from the market. The objects of accountability involved more than 1202 persons of Dong Jianggao, major shareholders and actual controllers. A total of 113 persons responsible were fined and punished with top-notch fines to the public security. The organs transferred 19 suspected criminal cases and actively supported the peoples courts in hearing civil compensation cases for false statements, which formed a strong deterrent to the illegal acts of information disclosure of listed companies.

Next, the SFC will continue to strengthen the enforcement of the illegal acts of information disclosure of listed companies, so as to encourage listed companies and major shareholders to tell the truth, make true accounts, make timely speeches, firmly adhere to the four bottom lines, not disclose false information, not engage in insider trading, not manipulate stock prices, and not harm the interests of listed companies. All kinds of intermediaries are responsible, purifying the market ecology, striving to improve the quality of listed companies, consolidating the basic plate of the real economy, and escorting the construction of a standardized, transparent, open, dynamic and resilient capital market.