The "two strong and two strict" policy was implemented. Under the registration system, the Shenzhen Stock Exchange for the first time imposed a "qualification penalty" on the recommendation institutions and accounting firms that would not be accepted temporarily.
On May 14, Dahua Certified Public Accountants, Huaxi Securities and relevant responsible persons were severely punished by Shenzhen Stock Exchange with "qualification penalty" of temporarily refusing to accept documents due to the case of financial fraud of Jin Tongling.
Recently, the new "National Ninth Article" issued by the State Council clearly requires that we strictly investigate illegal issues such as fraudulent issuance, build a comprehensive punishment and prevention system against counterfeiting in the capital market, and seriously punish illegal acts in key areas such as financial fraud and capital occupation.
The reporter learned that the recent vicious cases of violations of laws and regulations, which were investigated and handled strictly and quickly, released a strong signal of "strict supervision". The CSRC and the Exchange are severely punishing the "cancer" in the capital market, such as fraudulent issuance and financial fraud, by strengthening the "qualification punishment" and heavy punishment, increasing the three-dimensional accountability, and tightening the delisting standards, to effectively maintain the foundation of market integrity and protect the legitimate rights and interests of investors.
Make full use of "qualification punishment" and heavy punishment
As a market organizer, the types of heavy punishment imposed by the Exchange on the subject of violations of laws and regulations mainly include publicly identifying that it is not suitable to serve as a director, supervisor, senior manager of a listed company, and temporarily refusing to accept and issue documents related to securities business and securities service business.
According to the regulations, after being publicly recognized, the party concerned shall not hold the post of director, supervisor or senior officer of the original listed company, nor shall he hold the post of director, supervisor or senior officer of other listed companies during the period of public recognition. The severe "qualification punishment" really makes the subject of violations of laws and regulations feel distressed.
Since 2021, the Shenzhen Stock Exchange has continuously strengthened the implementation of publicly identifying that it is not suitable for serving as the director, supervisor and senior manager of listed companies, with 19, 36 and 28 person times respectively in three years. Since 2024, 23 "key minorities" of 11 companies, such as Danbang Tui and * ST Meishang, have been publicly identified for three years to a lifetime.
The objects that are publicly identified as not suitable for serving as directors, supervisors and senior executives of listed companies are usually the "key minority" who are mainly responsible for the company's violations. Most of them are the controlling shareholders, actual controllers, chairman of the board of directors, etc. who instruct and organize violations, and may also include other directors, supervisors and senior executives who participate in and cooperate with the company.
Taking * ST Meishang, which has attracted much attention from the market recently, as an example, the company's actual controller, Wang Yingyan, violated the obligation of honesty and trustworthiness, abused the control position to damage the independence of the listed company, and embezzled the funds of the listed company. On June 14, 2022, Shenzhen Stock Exchange publicly determined that Wang Yingyan was not suitable to serve as the director, supervisor and senior officer of the listed company within ten years. After clarifying that he is mainly responsible for the company's financial fraud and irregularities, on April 26, 2024, Shenzhen Stock Exchange further publicly determined that he was unfit to serve as a director, supervisor or senior officer of a listed company for life.
For another example, the Shenzhen Stock Exchange will publicly identify Jin Tongling and related parties in January 2024. Jintongling has falsely increased or decreased its operating income and profits in various ways, resulting in false records in the annual report from 2017 to 2022. Shenzhen Stock Exchange will not only publicly identify the main responsible person who makes decisions and organizes the implementation of violations as not suitable for serving as the director, supervisor and senior manager of listed companies for ten years, but also publicly identify other directors, supervisors and senior managers who participate in violations as not suitable for serving as the director, supervisor and senior manager of listed companies for five or three years.
In addition to the public recognition and heavy punishment of the company and related parties, the derelict intermediaries and personnel in malignant cases also cannot escape the heavy punishment of not accepting documents temporarily.
The temporary rejection of documents refers to the temporary rejection of relevant business documents issued by professional institutions or their practitioners. It is a "qualification penalty" imposed by the Exchange on intermediary institutions and their practitioners, such as recommendation and underwriting, audit and evaluation, which is directly related to whether the intermediary institutions and their practitioners can perform their duties, and belongs to the heavy punch in the punishment. The object of punishment is usually the sponsor, accounting firm and other intermediaries and related personnel who are not diligent and responsible and have serious circumstances and bad market impact.
Dahua Certified Public Accountants Co., Ltd., as the audit institution of Jintongling's annual financial statements from 2017 to 2022 and the reporting accountant who issued shares to specific objects in 2020, failed to be diligent and responsible in the audit of Jintongling's annual financial statements from 2017 to 2022, and the audit report issued by it contained false records. Shenzhen Stock Exchange will temporarily refuse to accept documents and publicly condemn Dahua Stock Exchange for 6 months, and will temporarily refuse to accept documents and publicly condemn three signing accountants for 36 months or 12 months.
As the sponsor of Jintongling's stock issuance project to specific targets in 2020, Huaxi Securities failed to perform due diligence, the relevant reports such as the listing recommendation issued by it were untrue, and the implementation of continuous supervision and on-site inspection was not in place. Shenzhen Stock Exchange temporarily refused to accept documents and publicly condemned Huaxi Securities for six months, temporarily refused to accept documents and publicly condemned two sponsor representatives of the project for two years, and circulated a notice of criticism to two sponsor representatives who continued to supervise the project.
In addition to the above-mentioned intermediaries and practitioners who received a "qualification penalty" ticket, three other intermediaries and practitioners were subject to disciplinary action for certain violations during the period of continuous supervision or non-public issuance of corporate bonds. The sponsor of Jintongling's non-public offering of shares in 2017, Guohai Securities, the independent financial consultant of the project of issuing shares to purchase assets and raise supporting funds in 2018, Soochow Securities, the main underwriter of bonds in 2021, and 5 relevant sponsor representatives, project sponsors and other responsible persons were all criticized and punished by Shenzhen Stock Exchange in a circular.
Strengthen all-round and three-dimensional accountability
The Opinions on Further Improving the Quality of Listed Companies issued by the State Council clearly pointed out that we should promote the revision of relevant laws and regulations, increase the administrative and criminal legal liability for financial fraud, capital occupation and other violations, improve the civil litigation and compensation system for securities, and significantly increase the cost of violations of laws and regulations for relevant responsible subjects.
Judging from several major cases recently investigated and dealt with by the CSRC, the illegal acts that seriously damage the interests of investors, such as fraudulent issuance and financial fraud, are not "retreated", but are resolutely cracked down, strengthened three-dimensional accountability, and let the counterfeiters bear the due illegal costs.
At present, China has formed a three-dimensional accountability system of self-discipline supervision, administrative punishment, civil compensation, and criminal accountability for violations of laws and regulations of listed companies, significantly increasing the cost of violations of laws and regulations of relevant subjects, and forming a powerful deterrent to the market.
Taking the case of Amethyst storage fraud issuance as an example, on the basis of the self-regulation of the exchange, the company and relevant responsible personnel were fined more than 80 million yuan in total, and the two actual controllers were banned from entering the market for life and 10 years respectively; In terms of civil compensation, intermediaries compensated more than 16900 investors by 1.086 billion yuan through advance compensation, and four intermediaries paid about 189 million yuan in administrative settlement fees; In terms of criminal accountability, the actual controller of the company suspected of criminal offences was arrested by the procuratorate.
Strictly crack down on information disclosure violations such as fraudulent issuance and financial fraud in accordance with the law is an important guarantee to maintain the order of the capital market and effectively play the role of the capital market. The reporter learned that Shenzhen Stock Exchange will further implement the spirit of the Central Financial Work Conference and the requirements of the new "National Ninth Article", strictly supervise major violations in key risk areas such as financial fraud and fraudulent issuance in accordance with the unified deployment of the CSRC, and resolutely apply "qualification punishment" measures such as temporarily refusing to accept documents and identifying inappropriate candidates, We will effectively increase the cost of violating laws and regulations, and severely punish the "cancer" of the capital market, such as fraudulent issuance and financial fraud.
