Many well-known intermediaries such as Zhongde securities, Zhongtai Securities Co.Ltd(600918) , Lianda, Huapu Tianjian and ShineWing were sued by investors and stood in the dock because they were involved in the case of false statements in securities such as LETV and Jia Yueting.
On January 18, a warm reminder circulated in the industry.
According to the “warm tips”, the CSRC will not receive yongzhonghe and Jindu new application materials from January 18. At present, the intermediaries that the CSRC does not receive new newspaper materials include: Zhongde securities, Hualong securities, ZTE caiguanghua, Kaiyuan asset appraisal, xinyongzhong and Jindu.
In response, ShineWing published an internal email and responded, express: “At present, there is a rumor that the application materials of the exchange will not be accepted in the market, because we have received the CSRC’s investigation on the audit of LETV’s annual reports in 2015 and 2016. According to the provisions of the CSRC, IPO, refinancing and other related administrative licensing businesses should not be suspended. After communicating with the Development Department of the CSRC, they have not issued a notice to suspend the acceptance of ShineWing’s IPO and refinancing. ”
ShineWing responded
On January 18, ShineWing received the notice of investigation of suspected violations of laws and regulations in the annual report audit business from the CSRC.
ShineWing said that the annual report audit mentioned in the investigation should be the annual report audit of LETV information technology (Beijing) Co., Ltd. (hereinafter referred to as LETV) in 2015 and 2016.
Previously, the CSRC issued the decision on administrative punishment of the CSRC (15 responsible subjects such as LETV and Jia Yueting).
According to the decision on administrative punishment of CSRC, LETV’s non-public offering of shares in 2016 constituted a fraudulent offering. On September 23, 2015, LETV’s application for non-public offering of shares was reviewed by the issuance Audit Committee of CSRC and passed unconditionally. On May 19, 2016, China Securities Regulatory Commission issued the reply on approving LETV information technology (Beijing) Co., Ltd.’s non-public offering of shares. On May 25, 2016, LETV held the 21st Meeting of the third board of directors to consider and approve the proposal to extend the validity of the resolution of the general meeting of shareholders of LETV’s non-public offering.
On August 8, 2016, LETV was listed in a non-public offering. LETV issued 106.643 million new shares in this non-public offering, raising 4.799 billion yuan. The three-year financial data reported and disclosed were from 2012 to 2014 and from January to June 2015.
In this regard, ShineWing believes that the corresponding audited financial report has not been used for LETV to obtain IPO and refinancing approval.
According to paragraphs 3 and 4 of Article 15 and paragraph 3 of Article 22 of the decision on Amending the provisions of the China Securities Regulatory Commission on the implementation procedures of administrative licensing issued by the CSRC in 2018 Paragraph 4 and the opinions on the application of relevant provisions in Articles 15 and 22 of the provisions on the implementation procedures of administrative licensing of China Securities Regulatory Commission – opinions on the application of securities and futures laws No. 13, the financial audit of the annual report filed this time is an act of providing services in non administrative licensing matters, It does not fall within the scope of the decision of rejecting the application made by the CSRC.
defendant Xin Yongzhong
ShineWing Certified Public Accountants (special general partnership) has been established for more than 30 years. It is one of the eight largest certified public accountants in China.
At present, the company has 4 parallel business sections, namely, audit verification, management consulting, tax and accounting services, and engineering management consulting. There are 80 offices in Chinese mainland and 15 other countries or regions, with a total number of employees over 10000, including 480 partners.
On January 17, Shanxi Securities Co.Ltd(002500) announced that the holding subsidiary Zhongde securities recently received a civil complaint served by the Beijing Financial court. 2000 plaintiffs such as Shanghai Junying asset management partnership (limited partnership) filed a civil lawsuit against LETV and other 21 defendants, asking LETV to compensate for the investment losses caused by its false statements, totaling 4.571 billion yuan, The other 20 defendants were required to bear joint and several liability.
LETV investors believe that LETV’s rights and interests are damaged due to LETV’s misrepresentation, and LETV is required to bear civil liability for misrepresentation infringement. Jia Yueting and other 14 natural persons are jointly and severally liable for misrepresentation fault.
In addition, three securities companies including Sino German securities and three accounting firms were jointly and severally liable for failing to exercise due diligence and failed to find the financial fraud of LETV.
The three accounting firms involved are Lianda Certified Public Accountants (special general partnership), Huapu Tianjian Certified Public Accountants (Beijing) Co., Ltd. and ShineWing Certified Public Accountants (special general partnership).
According to public information, on May 7, 2021, the Beijing Financial court accepted the case that 11 plaintiffs including Wang Jing jointly sued 21 defendants such as LETV and Jia Yueting for Securities Misrepresentation liability dispute. The plaintiffs Wang Jing and Liu Guoliang were jointly elected as the proposed representatives by 11 plaintiffs, and requested to represent other investors with the same kind of litigation claims and apply to join the lawsuit, Bring an ordinary representative action.
After preliminary examination, the Beijing Financial court decided to apply the ordinary representative procedure to try the case, and made (2021) Jing 74 min Chu No. 111 civil ruling on July 30, 2021 to determine the scope of obligees in the case.
On September 30, 2021, the Beijing Financial court issued an announcement on the registration of litigation rights of representatives in Securities Misrepresentation liability disputes such as LETV and Jia Yueting.
It is reported that the case is the first ordinary representative litigation case of securities disputes accepted by the Beijing Financial court. Huang Jiangdong, a senior consultant of Guohao law firm (Shanghai) and doctor of law who has worked in the securities regulatory system for many years, said: “the judgment supports the possibility that investors will be compensated.”
