I have received 5 fines since the beginning of the year.
Author | Liu Qinwen
Editor | Li Baiyu
Source | Yema Finance
In the recent financial supervision storm, Haitong Securities Station has reached the "storm" center.
From 2024 to now, in only five months, Haitong Securities has received five tickets, involving the IPO or listed companies such as Ward Agricultural Machinery, CNNC Titanium Dioxide (002145. SZ), Gree Real Estate (600185. SH), Collide, etc. These penalties are mainly related to the irregularities in the recommendation business of Haitong Securities, including but not limited to the failure to fulfill due diligence on IPO projects, unauthorized alteration of the prospectus, weak internal quality control, helping customers to increase arbitrage and other issues.
It is worth noting that Haitong Securities has not only received warnings and punishments this year, It was also required by the Shanghai Stock Exchange to "conduct a comprehensive self-examination of the listing sponsor project". This requirement of the regulator is not without reason, According to Wind statistics, in the three years from May 2021 to now, Haitong Securities has terminated 40 IPO projects.
Under the background of the new IPO regulations, which severely crack down on "breaking through" projects, the investment banking business of Haitong Securities has declined for two consecutive years. As a leading securities company in the industry, can Haitong Securities survive the storm and rally?
Five tickets have been received at the beginning of the year,
Haitong Securities: continuous rectification
In October last year, the IPO trip of Ward Agricultural Machinery, which had been submitted for registration for 20 months, ended with voluntary withdrawal of application materials. More than two months later On January 5, 2024, Haitong Securities, as the recommendation broker of Ward Agricultural Machinery, welcomed the "self-discipline supervision" measures of the CSRC. On January 8, Shenzhen Stock Exchange issued the Supervision Letter to Haitong Securities.
According to the investigation of Shenzhen Stock Exchange, in the process of recommending Wode Agricultural Machinery, Haitong Securities had four violations: it failed to continue to perform due diligence duties and timely report on the freezing of the shares held by the actual controller; The accuracy of the disclosure of related parties' inter-bank lending was not fully verified; Failing to pay sufficient attention to the issuer's imperfect accounting foundation and non-standard internal control; Altering the Prospectus without consent.
In particular, "changing the prospectus without consent" has attracted extensive attention from the outside world. According to the two versions of the Prospectus, the changes focus on the main business of Ward Agricultural Machinery, the purpose of raised funds, dividend policy, etc.
Source: Cans gallery
This is just the beginning. On January 29, more than 20 days later, Haitong Securities again registered on the notice of regulatory measures of Shanghai Stock Exchange.
In the notice, Haitong Securities was pointed out to have defects such as the obvious failure to fulfill the duties of the first sponsor business, the failure of the quality control core department of the investment bank to identify major risks of the project, and the lack of prudence in due diligence.
This time, it was recognized that "the performance of duties was not in place", involving three IPO projects, namely Huiqiang New Materials, Mingfeng Medical, and Zhizhen Shares. The sponsors of these three projects are all 6 people from Haitong Securities. At present, three enterprises have voluntarily withdrawn their applications, and the IPO project has been terminated.
The announcement of Shanghai Securities Regulatory Bureau in February revealed the weakness of internal control of OTC option business of Haitong Securities. On February 1, the Shanghai Securities Regulatory Bureau disclosed the Decision on Ordering Haitong Securities Co., Ltd. to Punish Relevant Personnel.
Upon investigation, the internal control related to OTC option business of Haitong Securities is not perfect, and the internal management system covering all links of OTC option business has not been established and improved; The reporting path and handling method of department level risk indicators exceeding the limit are not clear. The risk indicator system related to OTC derivatives business is not perfect.
In April, Haitong Securities was successively punished for CNNC Titanium Dioxide and Gree Real Estate bonds.
On April 30, CITIC Securities and Haitong Securities both disclosed that they had received the Administrative Punishment Decision of the CSRC.
According to the Administrative Punishment Decision, Haitong Securities and related parties were fined more than 234 million yuan in total for assisting CITIC Securities to realize improper stock returns in the China Nuclear Titanium Dioxide case, which violated the relevant regulatory provisions.
"The company sincerely accepts the punishment, pays the above fines within the specified time, and will reflect deeply, learn lessons, earnestly implement various rectification requirements, further optimize the compliance internal control mechanism, constantly improve the awareness and level of standardized operation, adhere to drawing inferences from one instance, and promote all businesses of the company in accordance with the law and prudently." Haitong Securities said.
On the same day, it was disclosed on the official website of Guangdong Securities Regulatory Bureau that Haitong Securities, as the lead underwriter and trustee of "21 Gedi02" and "22 Gedi02" bonds of Gree Real Estate, failed to perform their duties, such as The important information such as the opening price of the buildings around the individual inventory is lower than the project floor price has not been fully analyzed, verified and timely reported.
Source: Haitong Securities
In May, with Haitong Securities was once again pushed to the forefront of the storm by the exposure of the fraud event of the IPO of Dalian Kelide Technology Innovation Board.
The Shanghai Stock Exchange issued four tickets in succession for the Kelid incident, and the punishment subjects include Kelid, the sponsor Haitong Securities, the sponsor representative, Rongcheng Certified Public Accountants and the signing accountant. It refers to the weakness of Haitong Securities in checking the attributes of scientific innovation in the Kelid project and the continuous weakness of internal quality control of the recommendation business.
On May 23, in the latest information of shareholders' meeting released by Haitong Securities, Haitong Securities specifically proposed that, Perfect the compliance internal control system and give full play to the joint force of internal and external supervision.
"The Board of Directors of the Company continued to promote the performance of the Company's basic functions of compliance management, carried out the activity of" Year of Consolidation of Compliance Internal Control Culture ", optimized the construction of compliance management team, organically integrated compliance management with business development, and continued to strengthen the compliance management of subsidiaries by focusing on system and system construction, while strengthening the coordination of regulatory inspection and self inspection problem rectification, Intensify supervision and accountability efforts, continuously promote the rectification of problems discovered through inspections, supervision, and audits, and consolidate the quality and effectiveness of internal control inspections and rectification. ”Haitong Securities said.
The market ranks top,
40 IPO "broken dreams" in 3 years
In fact, although Haitong Securities has been punished or warned for many times, the overall number of underwriting of Haitong Securities is also large.
The ranking of equity financing sponsors, the number of declared projects, and the market share of Haitong Securities rank high. Wind shows that in the one-year period from May 22, 2023 to now, in terms of equity financing, Haitong Securities has raised a total of 37.479 billion yuan, ranking third. In the ranking of underwriting amount, the first project ranked first with a market share of 11.95%.
Source: Wind
While the market share is high, Haitong Securities also ranks among the best in terms of IPO withdrawal rate and termination number.
Wind data display, In the three years from May 2021 to now, there are 40 IPO application projects of Haitong Securities in the status of termination (withdrawal), termination of review, and termination of registration.
Among the 40 enterprises, 8 are specialized equipment manufacturing, computer, communication and other electronic equipment manufacturing, followed by 6 in software and information technology services, as well as pharmaceutical manufacturing, rubber and plastic products, automobile manufacturing, etc.
From the perspective of cancellation rate, since May 2021, Haitong Securities has reached 26.67%, ranking fourth.
Source: Wind
In fact, in addition to finding problems and intercepting them in the IPO phase, Some projects sponsored by Haitong Securities have been successfully listed, and financial fraud has been found.
Zhuojin Shares (688701. SH), listed on the Science and Technology Innovation Board of Shanghai Stock Exchange on September 16, 2021, has two main businesses: "comprehensive environmental protection management services" and "sales and services of environmental protection products".
Whether in terms of performance or stock price, Zhuojin shares are "listed at the peak". In the three years before listing (2018-2020), the operating revenue was respectively 211 million yuan, 291 million yuan and 341 million yuan, and the net profit was 40.2813 million yuan, 56.0731 million yuan and 45.2781 million yuan.
In the year of listing, Zhuojin Shares made financial fraud. On May 19, 2023, Zhuojin Shares announced that it had received the Administrative Punishment Decision issued by Zhejiang Securities Regulatory Bureau of the CSRC.
It is found that in the second half of 2021, Zhuojin Shares will include part of its costs in current accounts in the name of security deposit, The operating cost was falsely reduced by 27.9652 million yuan, and the total profit was falsely increased by 27.0567 million yuan , accounting for 11.47% and 57.84% of the disclosed amount for the current period, respectively.
After adjustment, Zhuojin actually realized a revenue of 413 million yuan in 2021, up 21.31% year on year, and a net profit of 17174700 yuan, down - 62.07% year on year. also In 2022, it will turn into a loss, with a net profit of - 0.94 billion yuan, which will be further expanded to - 120 million yuan in 2023.
On the secondary market, Zhuojin shares were issued at a price of 7.48 yuan per share. On the first day of listing, Zhuojin shares hit an intraday high of 19.91 yuan. Since then, the share price has fluctuated and dropped. As of May 23, it has closed at 5.32 yuan per share, with a total market value of 714 million yuan.
Source: Baidu Stock Connect
Through this IPO, Zhuojin shares raised 251 million yuan in total, of which, Haitong Securities received a recommendation and underwriting fee of 27.7 million yuan, with an underwriting recommendation commission rate of 11.03%.
Shangshi Development, which was listed in 1996, is mainly engaged in real estate development and operation, industrial investment, asset management, domestic trade, information services, etc.
On March 19, 2024, Shanghai Real Estate Development issued an announcement that it received the Notice of Administrative Penalty and Market Access Prohibition in Advance Through investigation, Shanghai Real Estate Development Co., Ltd. made fictitious contracts, inflated business implementation progress, implemented idle self circulation trade and participated in civil military integration trade, As a result, there were false records in the financial statements of Shanghai Real Estate Development from 2016 to 2021, with a total false increase of 4.722 billion yuan in revenue and 614 million yuan in total false increase in profits.
During this period, Haitong Securities was the sponsor of Shanghai Real Estate Development. Continuous supervision opinions show that everything is normal.
Source: Shangshi Development Annual Report
In addition to IPO projects, Haitong Securities also had violations when acting as a financial adviser.
In April 2015, ORRED (600666. SH) was listed on the backdoor of Southwest Pharmaceutical, and Haitong Securities acted as an independent financial adviser in this major asset restructuring.
During the asset restructuring, the original shareholders of ORRED made a performance commitment, that is, the accumulated net profit of ORRED from 2015 to 2017 was not less than 1.22 billion yuan. But in In the third year of backdoor listing, the performance of ORRED, which is still in the performance commitment period, suddenly changed its face, and its profitability was significantly weakened.
According to the financial report, from 2015 to 2017, ORRED achieved operating revenue of 1.151 billion yuan, 1.314 billion yuan and 1.184 billion yuan respectively, and net profit of 301 million yuan, 326 million yuan and - 0.24 billion yuan.
In June 2018, ORRED was investigated by the CSRC. It was found that there were false records in the financial statements of ORRED, and the total profits of the current period in 2016, 2017 and the first three quarters of 2018 were falsely increased by 160 million yuan, 100 million yuan and 144 million yuan.
In 2019, there were irregularities when acting as the sponsor of the financial advisory project in the major asset restructuring of ORRED Four project organizers from Haitong Securities have been placed under regulatory scrutiny by the Shanghai Stock Exchange. Haitong Securities was investigated by the CSRC.
In October 2021, Chongqing Regulatory Bureau will issue the Decision on Administrative Penalty to Haitong Securities, order Haitong Securities to correct, confiscate the financial advisory business income of 1 million yuan, and impose a fine of 3 million yuan; Li Chun and Jia Wenjing were warned and fined 50000 yuan respectively.
Now Ored has been * ST.
"The company will continue to follow the prudent business philosophy, further strengthen the internal control mechanism of investment banking business, improve the awareness of standardized operation, comprehensively improve the compliance risk management level of investment banking, and earnestly fulfill the obligation of diligence and responsibility," Haitong Securities said.
Source: Cans gallery
"It can be said that the strength of the fines issued by securities companies has increased significantly. This trend may reflect the stricter supervision of China's securities regulatory authorities on securities companies and the zero tolerance attitude towards violations. This attitude may continue after the introduction of the "New National Nine Rules", because the regulatory authorities are trying to improve the overall compliance of the securities industry to protect the interests of investors and maintain the fairness and order of the market. ”Bai Wenxi, Vice President of China Enterprise Capital Alliance, said.
"Roller coaster" of investment banking business,
How to be a good gatekeeper?
Behind the high market ranking and punishment, the income of Haitong Securities related business also took a "roller coaster".
The investment banking division of Haitong Securities mainly provides recommendation and underwriting services, financial advisory services, new third board services, etc.
Specifically, in 2019, the investment banking business income of Haitong Securities was 3.61 billion yuan, which will jump to 5.66 billion yuan in three years in 2021.
but After the peak in 2021, the investment banking business of Haitong Securities has declined for two consecutive years. According to the annual reports in 2022 and 2023, the company realized operating revenue of 25.948 billion yuan and 22.953 billion yuan respectively, and net profit attributable to the parent company of 6.545 billion yuan and 1.008 billion yuan. Among them, The business income of investment banking was 4.262 billion yuan, a year-on-year decrease of 24.69%; In 2023, the operating revenue will be 3.631 billion yuan, a year-on-year decrease of 14.8%.
Source: Cans gallery
Haitong Securities also seriously expressed that, Earnestly implement various rectification requirements, further optimize the compliance internal control mechanism, constantly improve the awareness and level of standardized operation, adhere to drawing inferences from other cases, and promote all businesses of the company in accordance with laws and regulations, steadily and prudently.
Against the backdrop of increased punishment, securities firms need to pay more attention to compliance management and enhance employees' compliance awareness. At the same time, companies should establish sound internal systems to prevent possible violations. For securities firms that have been punished, they should take every punishment decision seriously, actively take measures to correct mistakes, and avoid being punished again Bai Wenxi, Vice President of China Enterprise Capital Alliance, said.
Ding Jihua, the chief compliance expert of Beijing Danhuasheng Management Consulting Co., Ltd., also pointed out that "in the context of strict supervision, The securities industry needs to return to its original intention and re recognize that the value of intermediaries lies in playing a key gatekeeper role. The key to its survival and development is to win the trust of investors by providing professional services of integrity and compliance. Only by establishing a sound compliance management system and proving its effective implementation to regulators, investors and other stakeholders can we prevent compliance risks, reduce and mitigate law enforcement penalties, realize the healthy development of the securities industry, and support the high-quality development of the capital market. "
What's your opinion on the recent fines issued by securities firms? How does the "gatekeeper" implement his own responsibility? Welcome to leave a message below to discuss.
