sicbodicegame| Many securities firms were fined together!

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Source: China Fund Daily

China Fund Daily Morning Dawn

The matter involves gold channeling (safeguarding rights) financial fraud, and a number of securities firms have received regulatory fines!

On May 14, Jiangsu Securities Regulatory Bureau announced a number of administrative supervision measures decisions at one time. Among them, Huaxi Securities was taken to suspend the qualification of sponsor business, and two sponsor representatives were identified as inappropriate candidates. Three other brokerages and related insurance agents were issued warning letters.

From the perspective of the reasons for violations, the relevant securities firms are involved in Jin Tongling's financing activities in recent years not diligently and dutifully. In addition, Dahua Institute, which has provided audit services for Jin Tongling for a long time, was recently fined 4132 by Jiangsu Securities Regulatory Bureau.Sicbodicegame.08 million yuan, and suspended from securities service business for six months.

Let's look at the details--

Four securities firms were named by supervision.

All of them are involved in financial fraud.

Judging from the fine issued by the Jiangsu Securities Regulatory Bureau, Huaxi Securities was taken to suspend the qualification of sponsor business for six months, which was the most serious.

After investigation, Huaxi Securities has some problems, such as lack of due diligence in due diligence, false records in the letter of recommendation for the listing of stocks issued to specific objects, false records in the relevant reports issued in the continuous supervision stage, and inadequate implementation of on-site inspection in the continuous supervision stage, in the course of the practice of Jin Tongling's non-public stock offering sponsor project in 2019.

At the same time, the two sponsor representatives of the project are also considered to have not done their duty diligently, are directly responsible for the violations in the recommendation stage of Huaxi Securities, and are found to be inappropriate candidates, they shall not hold the relevant duties or actually perform the above-mentioned duties in the recommendation business of securities issuance and listing of securities companies within two years. Two representatives of continuous supervision and recommendation in charge of the project were also issued a warning letter by Jiangsu Securities Regulatory Bureau.

In contrast, three other brokerages and relevant sponsor representatives were issued warning letters, involving Jin Tongling's non-public stock offering project in 2017, Jin Tongling's 2018 share purchase and fund-raising project, and Jin Tongling 2021 non-public bond offering project.

Jiangsu Securities Regulatory Bureau pointed out that the relevant securities firms did not perform their duties diligently in the project, there are some problems, such as insufficient performance of verification obligations, false records of continuous supervision opinions, false records of continuous supervision on-site inspection reports, non-compliance with the procedures for the release of continuous supervision reports, inadequate tracking and implementation of core opinions, imperfect working papers, and so on.

Financial fraud for six consecutive years

In retrospect, Jin Tongling's financial fraud attracted market attention through "self-explosion" in April last year.

In April 2023, Jin Tongling announced that in the process of preparing the financial statements in 2022, due to the excessive amount of performance pre-loss, the company's financial situation was self-examined and found that there were major errors and retroactive adjustments. After retroactive adjustment, Jin Tongling reduced the undistributed profit at the beginning of 2021 by 4%.SicbodicegameThe net profit in 2021 was adjusted from 19.863 million yuan to-48.0457 million yuan.

Since then, the Shenzhen Stock Exchange quickly issued an inquiry letter to Jin Tongling's annual report. In June 2023, Jin Tongling was placed on file for investigation by the Securities Regulatory Commission.

In January this year, the administrative penalty from Jiangsu Securities Supervision Bureau officially landed. According to the investigation, from 2017 to 2022, Jin Tongling and its wholly-owned subsidiaries adjusted the completion progress (implementation progress) of the EPC general contract project by falsifying the project image progress confirmation table and invoice, falsely increasing or reducing the total operating income and profits of 12 companies.SicbodicegameJin Tongling and its holding subsidiaries falsely increase business income and total profits by recognizing income in advance without delivery and by returning sales without deduction of income.

From 2017 to 2022, Jin Tongling falsely increased or decreased profits for six consecutive years, accounting for 103.06%, 133.10%, 31.35%, 101.55%, 5774.38% and 11.83% of the company's total disclosed profits (absolute value), respectively, resulting in false records in the company's annual reports for the corresponding years.

In the end, Jin Tongling was ordered by the Jiangsu Securities Regulatory Bureau to correct, given a warning and fined 1.5 million yuan. Four "Dong Jiangao" at that time were given a warning and fined 600000 to 2 million yuan respectively.

Dahua Institute was fined 41.32 million yuan.

Suspension of securities service for 6 months

In addition to the four securities firms, Dahua accounting firm, which is also an intermediary, also suffered penalties from Jiangsu Securities Regulatory Bureau.

A few days ago, according to the administrative penalty No. 1 of 2024 announced by the Jiangsu Securities Regulatory Bureau, Dahua was ordered to correct, confiscated 6.8868 million yuan of business income, fined 34.434 million yuan, and suspended securities service business for six months. Three signed CPAs were given a warning and fined 1.5 million yuan, 800000 yuan and 400000 yuan respectively.

The Jiangsu Securities Regulatory Bureau pointed out that Dahua Institute provided audit services for Jin Tongling's financial statements from 2017 to 2022 and issued standard unqualified audit reports, with six-year audit revenue totaling 6.8868 million yuan. Dahua Institute did not do its duty diligently in the audit of Jin Tongling's annual financial statements from 2017 to 2022, and the audit report issued was falsely recorded.

In this regard, on the afternoon of May 13, Dahua Institute issued a statement saying that it sincerely accepted the punishment decision of the regulatory authorities, consciously accepted the supervision of various regulatory agencies, corporate customers, and all sectors of society, and carried out comprehensive rectification and reform as required. Organize deep self-reflection within the scope of the institute.

At the same time, the number of listed companies preparing to "break up" with Dahua is still increasing. On May 14, Delis, Zhongchuang Environmental Protection (rights protection), Sunyuan Technology (rights protection), Watson Pharmaceuticals, Sanren Bank and other companies issued announcements to cancel the submission of the "motion on the company's re-employment of accounting firms" to the shareholders' meeting. The accounting firms originally scheduled to be renewed are all Dahua firms.

In March this year, the CSRC issued the opinions on strict access to issuance and listing to improve the quality of listed companies from the source (for trial implementation). It is mentioned that the establishment of a regular rolling on-site supervision mechanism for intermediary agencies, supervision and inspection of the due diligence of sponsor agencies, lawyers and certified public accountants, accountability and follow-up rectification, and resolute filing and inspection of suspected violations of laws and regulations. Urge intermediary agencies to earnestly shoulder the responsibility of preventing financial fraud and make full use of capital flow verification, customer supplier penetration verification, on-site verification and other methods to ensure that financial data are in line with the real business situation.