On March 20, Shanxi Securities Co.Ltd(002500) announced that Yang Lijun and Wang Xin, the signatory and sponsor representatives of the holding subsidiaries Zhongde securities and LETV’s 2016 non-public offering project, had received the prior notice of administrative punishment from the CSRC. The CSRC plans to decide to give a warning to Sino German securities, confiscate the business income of 5.6604 million yuan and impose a fine of 113208 million yuan; Two recommendation representatives were warned and fined 150000 yuan respectively.
Shanxi Securities Co.Ltd(002500) announcement shows that Sino German securities did not fully obtain and prepare the sales of the top ten customers in LETV’s non-public offering recommendation business in 2016, and did not effectively verify the authenticity of the business.
On May 26, 2015, LETV announced its application for non-public offering. On June 2, 2016, LETV received the reply from the CSRC. On August 8, the non-public offering of shares was listed on the Shenzhen Stock Exchange. LETV privately issued new shares to four qualified investors, 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 prior notice of administrative punishment pointed out that Sino German securities did not fully obtain and compile the sales of the top ten customers in LETV’s non-public offering recommendation business in 2016, and did not effectively verify the authenticity of the business. The above-mentioned acts of Sino German securities are suspected of violating the working standards for due diligence of sponsors, the measures for the administration of securities issuance and listing recommendation business and other relevant provisions.
It is understood that in order to fully implement the “zero tolerance” requirement, the CSRC has simultaneously verified Ping An Securities, the IPO sponsor of LETV. It plans to order Ping An Securities to make corrections and suspend the qualification of the sponsor for three months, and take administrative and regulatory measures such as identifying the sponsor representative and the person in charge of the company’s sponsor business for 5 to 10 years respectively. At present, it is informing the relevant parties in advance according to the procedure.
