Just now, more than 40 companies to be listed have suspended the review due to the filing of intermediaries by the CSRC, involving 4 IPO companies on the science and innovation board, 31 IPO companies in Shenzhen and 9 IPO companies on the Beijing stock exchange.
The above-mentioned enterprises are respectively “stepping on thunder” Beijing Jindu law firm (hereinafter referred to as “Jindu law firm”), ShineWing Certified Public Accountants (special general partnership) (hereinafter referred to as “ShineWing”) and Sino German Securities Co., Ltd. (hereinafter referred to as “Sino German securities”). Some of these suspended enterprises are in the state of inquiry, while others have submitted registration applications.
Sino German securities was filed by the CSRC and related to LETV. On January 18, Shanxi Securities Co.Ltd(002500) announced that the Securities Regulatory Commission decided to file a case against Sino German securities, a holding subsidiary, because its recommendation business was suspected of violating laws and regulations in LETV’s 2016 non-public offering of shares. Jindu law firm and ShineWing Zhonghe are also related to this.
The Chinese reporter of the securities firm learned that there had been cases in which IPO companies had been dragged down by intermediaries to suspend the review. According to the practice, if the issuer’s recommendation agency was investigated by the administrative organ for suspected violations of laws and regulations and the case has not been closed, it can apply for resumption of the review after the recommendation agency has completed its review of the issuer’s recommendation work. Previously, there was also a precedent for listed enterprises to replace intermediaries.
more than 40 companies to be listed have been suspended
as of 10 p.m. on the 26th, a total of 44 IPO enterprises were suspended due to the filing of intermediaries by the CSRC. The reasons for the suspension of review of enterprises were related to three intermediaries, including Jindu law firm, ShineWing and Sino German securities.
Among the enterprises suspended from the review, the enterprises in the inquiry stage are the most, including Saiwei times, Qianlima, Xinghe shares, Southeast electronics, Keyuan pharmaceutical, etc. Some enterprises are in the acceptance status, including Mingyang electric, CIMC huanke, Lianzhong information, Guangdong Jianke and other companies. Other enterprises have submitted registration applications, including Yuandao communication, Huada Jiutian, fantuo digital innovation, xinjufeng, xianglou new material and other companies.
Due to the large number of projects involved in Jindu law firm, the review of nearly 30 IPO companies has been suspended, which is related to this.
the review was suspended in a large area, or related to LETV. On January 18, Shanxi Securities Co.Ltd(002500) announced that its holding subsidiary Zhongde securities received the notice of filing a case from the CSRC. Since the recommendation business of Sino German securities was suspected of violating laws and regulations in LETV’s 2016 non-public offering of shares, the CSRC filed a case against Sino German Securities for investigation.
The day before the announcement on filing the case, Shanxi Securities Co.Ltd(002500) also announced that the holding subsidiary Zhongde securities received a civil complaint served by the Beijing Financial court, and the cause of action was a dispute over the liability for Securities Misrepresentation. Two thousand plaintiffs including Shanghai Junying asset management partnership (limited partnership) filed a civil lawsuit against LETV information technology (Beijing) Co., Ltd. and other 21 defendants, asking LETV to compensate for the investment losses caused by its false statements, totaling about 4.571 billion yuan, and asking the other 20 defendants to bear joint and several liability.
LETV’s 2016 non-public offering of shares constituted a fraudulent offering, which was officially recognized by the decision on administrative punishment issued by the CSRC on April 12, 2021. The administrative punishment letter pointed out that LETV submitted and disclosed false records in IPO related documents and annual reports from 2010 to 2016 due to financial fraud from 2007 to 2016, failed to disclose related party transactions as required, failed to disclose the provision of guarantees for LETV holdings and other companies, and failed to truthfully disclose the performance of Jia Moufang and Jia Yueting’s loan commitments to listed companies, In 2016, the non-public offering of shares constituted illegal facts such as fraudulent issuance. The CSRC imposed administrative penalties on 15 responsible subjects such as LETV and Jia Yueting, of which LETV was fined more than 240 million yuan and Jia Yueting was fined more than 241 million yuan.
Zhongde securities, ShineWing and Jindu are intermediaries providing services for LETV’s non-public offering of shares in 2016.
On January 20, Xinghe shares, which applied for gem IPO, was cancelled the audit on the night before the meeting. It should have been officially listed on the gem Audit Committee for audit on January 21. At that time, it triggered speculation in the market about Xinghe stock intermediary or regulatory filing.
How long does resume after suspending the review
according to the data, there are 4 IPO projects under review in Sino German securities, 23 IPO projects under review in ShineWing, 35 proposed IPO projects under the registration system of jindulu, and 12 enterprises to be listed on the main board of Shanghai and Shenzhen. There may be a suspension of review announcement for subsequent IPO projects.
According to the regulations, for the enterprises under review, if the recommendation institution of the issuer is investigated by the administrative organ for suspected violations of laws and regulations and the case has not been closed, it may apply for resumption of the review after the recommendation institution completes its review of the recommendation work of the issuer.
Generally speaking, the review time will not be too long. Previously, the Byd Company Limited(002594) semiconductor issuance lawyer Tianyuan law firm was involved in blue mountain technology related events and was filed for investigation by the CSRC. On August 18, 2021, Byd Company Limited(002594) semiconductor suspended the audit. On September 1, 2021, Tianyuan law firm issued a review report, and Byd Company Limited(002594) semiconductor resumed the audit, 14 days later. Of course, there are also precedents for some IPO projects to change intermediaries.
At the same time, for new projects involving intermediaries, generally speaking, the exchange will reject materials and will not resume until the end of the case.
under the background of the registration system reform, strict supervision of intermediaries is an established trend. Since 2019, the CSRC has investigated and dealt with 80 illegal cases of intermediaries, involving 24 accounting firms, 8 securities companies, 7 asset evaluation institutions, 3 law firms and 1 credit rating agency, covering key areas such as stock issuance, annual report audit, asset acquisition and major asset restructuring. In 2021, the CSRC filed and investigated 39 illegal cases of intermediaries according to law, more than double the same period last year, and transferred or notified the clues of 2 cases to the public security organ.
The CSRC said on January 14 that some intermediaries and employees lack independence and professionalism, imperfect quality control system and management mechanism, lack of professional skepticism and loss of professional bottom line. Due diligence of intermediaries is an important link to improve the quality of information disclosure in the capital market, an important basis to prevent securities fraud and fraud and protect the legitimate rights and interests of investors, and an inevitable requirement to deepen the reform of the capital market and promote the high-quality development of the capital market. In the next step, the CSRC will strengthen the effective linkage of daily supervision, supervision and inspection, inspection and law enforcement, adhere to the “double investigation of one case”, seriously investigate the illegal responsibilities of intermediaries and employees according to law, effectively increase the illegal cost, effectively urge them to give full play to the role of “gatekeeper” in the capital market, and effectively build a market operation system with information disclosure as the core
