Due to the recommendation project of LETV, Sino German securities and Ping An Securities were subject to regulatory punishment.
On March 20, Shanxi Securities Co.Ltd(002500) ( Shanxi Securities Co.Ltd(002500) ) announced that on March 18, Yang Lijun and Wang Xin, the signing and sponsor representatives of Sino German securities and LETV’s 2016 non-public offering project, received the advance notice of administrative punishment from the CSRC, ordered Sino German securities to make corrections, gave a warning, confiscated 5.6604 million yuan of business income and imposed a fine of 113208 million yuan; Yang Lijun and Wang Xin were warned and fined 150000 yuan respectively.
Not only Sino German securities, according to the “Securities Times” on March 20, due to LETV’s IPO case, Shenzhen Securities Regulatory Bureau also recently issued a prior notice of administrative regulatory measures to Ping An Securities, which plans to order Ping An Securities to make corrections and suspend the qualification of recommendation institution for three months.
Ping An Securities intends to be suspended as a sponsor for three months
According to the prior notice, due to LETV’s case, Shenzhen securities regulatory bureau plans to order Ping An Securities to make corrections and suspend the qualification of recommendation agency for three months, identify the recommendation representative and then person in charge of recommendation business of LETV’s IPO project as inappropriate personnel for 5-10 years, and take regulatory talks and other measures for other relevant personnel related to compliance business.
In response, Ping An Securities responded to surging news on March 20 that the company had received a prior notice. Over the past decade, the company has continued to establish and improve its internal control mechanism, and the level of compliance risk control has continued to improve. Based on the principle of customer first, the company will actively communicate with the supervision on the basis of laws and regulations, so as to better serve the development of the real economy.
The Securities Times reported that at present, the regulatory authorities are conducting a prior notification procedure and will officially issue corresponding administrative supervision measures after the procedure is completed.
Sino German securities confiscated 16.98 million yuan
Shanxi Securities Co.Ltd(002500) announcement shows that LETV announced its application for non-public offering on May 26, 2015. On August 8, 2016, LETV’s non-public offering of shares was listed on the Shenzhen Stock Exchange, raising 4.799 billion yuan.
According to another investigation by the CSRC, LETV falsely increased its performance for ten consecutive years from 2007 to 2016, including the financial data of non-public offering application documents from 2012 to 2014 and from January to June 2015. From 2012 to 2014, LETV falsely increased its revenue by 896533 million yuan, 1999817 million yuan and 3519419 million yuan respectively, and falsely increased its profits by 84.451 million yuan, 1933969 million yuan and 3427038 million yuan, accounting for 37.04%, 78.49% and 470.11% of the total profits disclosed in the current period.
The notice shows that Sino German securities failed to fully obtain and prepare the sales of the top ten customers and failed to effectively verify the authenticity of the business in LETV’s non-public offering recommendation business in 2016, which is suspected of failing to be diligent and responsible.
According to the provisions of article 192 of the securities law of 2005, the CSRC plans to decide: order the Sino German securities to make corrections, give a warning, confiscate the business income of 5.6604 million yuan and impose a fine of 113208 million yuan; Yang Lijun and Wang Xin were warned and fined 150000 yuan respectively.
As early as January 13 this year, Shanxi Securities Co.Ltd(002500) announced that Shanxi Securities Co.Ltd(002500) holding subsidiary Zhongde Securities Co., Ltd. received the civil complaint served by the Beijing Financial court, and the cause of action was the dispute over the liability for Securities Misrepresentation. Shanghai Junying asset management partnership (limited partnership) and other 2000 plaintiffs filed a civil lawsuit against LETV and other 21 defendants to the Beijing Financial court, requiring LETV to compensate for the investment loss of 4.571 billion yuan caused by its false statement, and requiring the other 20 defendants to bear joint and several liability. The lawsuit involved 14 natural persons such as LETV and Jia Yueting, 3 securities companies such as Sino German securities and 3 accounting firms.
In addition to Sino German securities, the other two intermediaries are Ping An Securities and Zhongtai Securities Co.Ltd(600918) .
It is worth noting that on March 18, the Ministry of Finance and the CSRC issued a notice on further improving the effectiveness of internal control over financial reports of listed companies, proposing to strengthen the management, guidance and supervision of the implementation of enterprise internal control norms for listed companies, standardize the internal control audit behavior of accounting firms, and improve the effectiveness of internal control over financial reports and the quality of accounting information of listed companies, Strengthen financial and accounting supervision in the field of capital market.
