Sino German Securities Co., Ltd. (hereinafter referred to as “Sino German securities”) was filed by the CSRC for its recommendation business suspected of violating laws and regulations in the non-public offering of shares by LETV information technology (Beijing) Co., Ltd. (hereinafter referred to as “LETV”).
On January 18, Shanxi Securities Co.Ltd(002500) (002500, hereinafter referred to as ” Shanxi Securities Co.Ltd(002500) “) announced that Zhongde securities, a holding subsidiary, had received the notice of filing a case (Zheng Jian Li Jian Zi No. 03720220003) from the CSRC. The announcement pointed out that the recommendation business of Sino German securities was suspected of violating laws and regulations in LETV’s non-public offering of shares in 2016. According to relevant laws and regulations, the CSRC decided to file a case against Sino German securities.
Shanxi Securities Co.Ltd(002500) said that Sino German securities will fully cooperate with the relevant work of the regulatory authorities, and fulfill the obligation of information disclosure in strict accordance with the regulatory requirements. At present, the operation of the company is normal.
On January 17, Shanxi Securities Co.Ltd(002500) issued an announcement on the litigation involving the holding subsidiary, saying that due to the failure to find the financial fraud of LETV, Zhongde securities was required to bear joint and several liability by LETV investors.
According to the announcement, on January 13, 2022, Sino German securities received the civil complaint served by the Beijing Financial court, and the cause of action was the dispute over the liability for Securities Misrepresentation.
Specifically, 2000 plaintiffs such as Shanghai Junying asset management partnership (limited partnership) 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 misrepresentation, and requiring the other 20 defendants to bear joint and several liability.
The announcement said that at present, the litigation stage of the case is the first instance, and the court has not yet opened. Zhongde securities, one of the 21 defendants, is required to bear joint and several liability. In view of the fact that the case has not yet been heard, it is impossible to judge the impact on Shanxi Securities Co.Ltd(002500) current profits or future profits.
It is reported that in the lawsuit involving Sino German securities, LETV investors (plaintiffs) believed that LETV’s misrepresentation caused damage to its rights and interests and required LETV to bear civil liability for misrepresentation infringement; Jia Yueting and other 14 natural persons shall be jointly and severally liable for false statements; Three securities companies including Sino German securities and three accounting firms are jointly and severally liable for failure to exercise due diligence and fail to find the financial fraud of LETV.
According to tianyancha app, Shanghai Junying asset management partnership (limited partnership), one of the plaintiffs in this case, was established in November 2013 with a registered capital of RMB 10 million and an institutional type of private securities investment fund manager. Foreign investment in LETV sports culture industry development (Beijing) Co., Ltd., with an investment amount of 3551862 yuan.
According to tianyancha app, LETV was founded in 2004, with Tianjin Jiarui Huixin Enterprise Management Co., Ltd. holding 47.52778%, Jia Yueting holding 28.57242% and his brother Jia Yuemin holding 9.30513%. At present, the company has 873 litigation relations, 1396 court announcements, 3762 legal proceedings and 125 consumption restriction orders.
On April 2, 2021, the CSRC issued the decision on administrative punishment ([2021] No. 16), which determined that LETV had violations of laws and regulations, and imposed administrative penalties on LETV, Jia Yueting and other 14 natural persons.
According to the information on the official website, Sino German securities is a Sino foreign joint venture securities company jointly funded and established by Deutsche Bank and Shanxi Securities Co.Ltd(002500) . The company provides customers with a wide range of investment banking services, including various securities underwriting and consulting services related to the capital market.
In terms of equity of Sino German securities, the data show that by the end of 2020, Shanxi Securities Co.Ltd(002500) has a shareholding ratio of 66.7% and Deutsche Bank has a shareholding ratio of 33.3%.
In terms of performance, Sino German securities began to pick up in 2019 and 2020. Among them, the revenue reached 384 million yuan and 438 million yuan respectively, with a year-on-year increase of 26.97% and 13.95% respectively. In terms of net profit attributable to the parent company (hereinafter referred to as “net profit”), Sino German securities achieved 27 million yuan and 42 million yuan respectively in 2019 and 2020, with a year-on-year increase of 2649.03% and 52.63% respectively.
From 2017 to 2018, the performance of Sino German securities declined. Among them, the revenue was 576 million yuan and 302 million yuan respectively, with a year-on-year decrease of 22.14% and 47.51% respectively. The net profit was 118 million yuan and 01 million yuan respectively, with a year-on-year decrease of 33.52% and 99.16% respectively.
