Suffocate for dreams? At present, many securities service institutions have fallen into LETV vortex.
On the evening of January 18, Shanxi Securities Co.Ltd(002500) announced that the recommendation business of Sino German securities, a holding subsidiary, was suspected of violating laws and regulations and was filed by the CSRC, involving LETV.
In addition to Sino German securities, according to Chinese journalists from securities companies, Beijing Jindu law firm and ShineWing certified public accountants will also be investigated. Everyone in Kindu kept this secret.
It is worth noting that the above three institutions have “the same intersection”, and they are all securities service institutions of LETV’s fixed increase project in 2016. In 2021, Beijing Securities Regulatory Bureau determined that LETV’s non-public offering of shares in 2016 constituted a fraudulent offering.
Will this investigation affect the IPO projects in the hands of intermediaries? As of the press time on the evening of the 18th, there was no “suspension of audit” of IPO projects on GEM and Kechuang board on the same day. Several sources pointed out that the regulators suspended the acceptance of the newly declared IPO projects of the above institutions from January 18, which was denied by some people in ShineWing.
Some practitioners from law firms and accounting firms told Chinese reporters of securities companies that they have focused on the IPO projects of the aforementioned intermediaries, and the action of “digging the foot of the wall” will inevitably begin.
Sino German securities was filed for investigation
According to the announcement on Shanxi Securities Co.Ltd(002500) January 18, the holding subsidiary Zhongde securities is suspected of violating laws and regulations in its recommendation business in LETV’s 2016 non-public offering of shares. According to the securities law of the people’s Republic of China, the administrative punishment law of the people’s Republic of China and other laws and regulations, the CSRC decided to file a case for investigation.
Shanxi Securities Co.Ltd(002500) said that China and Germany securities will actively cooperate with the relevant work of the CSRC and fulfill the obligation of information disclosure in strict accordance with the regulatory requirements. At present, the operation of Shanxi Securities Co.Ltd(002500) is normal.
It is understood that as early as may 2019, Zhongde securities received the investigation notice (jzjhz No. 191350) from China Securities Regulatory Commission. Due to the case investigation, it was necessary to obtain the working papers related to LETV’s non-public offering of shares.
From the current IPO projects sponsored by Sino German securities, there are not many projects queued up for review by the CSRC and the exchange. Two IPO companies plan to be listed on the main board of Shanghai Stock Exchange, which is the stage of “pre disclosure and update”; There are 2 Gem IPOs, both in the inquiry stage; There are no projects on the scientific innovation board.
When intermediaries, including sponsors, are filed for investigation, will their IPO business be affected? According to the analysis of insiders, from the perspective of process, the audit of projects under review will be suspended and reviewed.
Taking the gem as an example, according to the review rules for the issuance and listing of shares on the gem of Shenzhen Stock Exchange, the sponsor or signature sponsor representative of the issuer, securities service institutions or relevant signatories are being filed for investigation by the CSRC due to suspected violations of laws and regulations in IPO, refinancing, M & A and reorganization. The case has not been closed, and the exchange will suspend the review.
If the issuer wants to change the sponsor or securities service institution, the changed securities firm and intermediary institution shall complete the due diligence within three months from the date of suspension of the audit, reissue the relevant documents, review the documents issued by the original sponsor or securities service institution, issue review opinions and explain the differences. If it is not replaced, the current recommendation institution and intermediary institution shall issue a review report to the Shenzhen Stock Exchange in time.
However, as of the evening of the 18th, when the Chinese reporter of the securities company cut the deadline, there was no project change audit status or suspension of audit on GEM and Kechuang board on the same day.
So, if Sino German securities wants to apply for a new IPO, will the project be affected? Taking the gem as an example, according to the review rules for the issuance and listing of shares on the gem of Shenzhen Stock Exchange, when the sponsors, securities service institutions and their relevant personnel are under investigation and investigation due to “other businesses suspected of violating laws and regulations and having a significant impact on the market, and the case has not been closed”, the Shenzhen Stock Exchange will not be subject to the issuance and listing application documents of hairdressers.
other intermediaries will also be involved in
Chinese reporters from securities companies learned from various channels that before the Sino German securities announcement was filed, two other intermediaries were also reported to be investigated by the CSRC, namely Beijing Jindu law firm and ShineWing certified public accountants.
During the interview, the Chinese reporter of the securities firm noted that there were lawyers engaged in securities business in Jindu law firm, which were kept secret and said it was inconvenient to evaluate. Another person close to Kindu told reporters that the investigation is expected to begin soon. As of the deadline, the Chinese reporter of the securities firm failed to obtain a formal response from Jindu.
The Chinese reporter of the securities firm also learned that ShineWing accounting firm said internally that the company received the notice of filing investigation from the CSRC on January 18, saying that the annual report audit business of the firm was suspected of violating laws and regulations, and the annual report audit should be the implementation of LETV’s annual report audit in 2015 and 2016.
The above two intermediaries have provided services for LETV. In LETV’s fixed increase project in 2016, Beijing Jindu law firm is the lawyer of LETV’s issuer; The audit institution and capital verification institution are Huapu Tianjian certified public accountants and ShineWing certified public accountants.
It is understood that in April 2021, Beijing Securities Regulatory Bureau issued the decision on administrative punishment to LETV, Jia Yueting and other natural persons. When listing the illegal facts, Beijing bureau pointed out that LETV made financial fraud from 2007 to 2016, and there were false records in the documents related to IPO application and annual reports from 2010 to 2016 submitted and disclosed by LETV; LETV’s non-public offering of shares in 2016 constituted a fraudulent offering.
Jindu and ShineWing are both large intermediaries in the IPO field. Whether relevant projects will be affected has attracted market attention. According to the statistics of Chinese journalists from securities companies, Jindu law firm has 48 IPO projects under review, mainly on the gem (28). ShineWing certified public accountants has 43 IPO projects under review, including 20 on the main board of Shanghai and Shenzhen and 20 on the gem.
At present, it is rumored that the regulators have suspended the acceptance of IPO materials newly declared by the above institutions since January 18. In this regard, someone from ShineWing told reporters that “the rumor is untrue”. ShineWing also mentioned internally that “after communicating with the issuance department of the CSRC, they have not issued a notice to suspend the acceptance of ShineWing’s IPO and refinancing.” As of the deadline, the reporter could not get a formal response from ShineWing.
