Log in to Sina Finance APP to search [Xinpi] to see more evaluation levels.

If you want to speculate in the stock market, you can see the research report of Jin Kirin analysts.MintopolynftAuthoritative, professional, timely, comprehensive, to help you tap the potential theme opportunitiesMintopolynft!

Source: Kingfisher Capital

For five consecutive years of fraud and false increase in profits of more than 1.MintopolynftSpecial message of .70 billion yuan (hereinafter referred to as ST Special letter (Rights Protection), 000070Mintopolynft.SZ), what kind of punishment will there be? the market is looking forward to an answer as soon as possible.

Recently, the ST special letter announced that on May 10, 2024, the company and related personnel received the "advance notice of Administrative punishment and Market ban" issued by the Shenzhen Regulatory Bureau of the China Securities Regulatory Commission. In addition, since May 14, 2024, issuers' shares have been subject to other risk warnings, and the short name of the transaction has been changed from "special message" to "ST special letter", with a limit of 5 per cent.

According to the content, in order to fulfill its performance commitment, Shenzhen Special hair East Intelligence Technology Co., Ltd., a subsidiary of ST, falsely increased revenue, increased or decreased operating costs and profits by means of intertemporal adjustment of operating costs and fictitious business, which led to false records in the 2015-2019 annual report of special information disclosure.

On May 17, the Supreme people's Court, the Supreme people's Procuratorate, the Ministry of Public Security and the China Securities Regulatory Commission issued opinions on handling illegal and criminal cases of securities and futures.

According to the "opinion", it is emphasized that financial fraud, embezzlement of assets of listed companies, insider trading, market manipulation and securities fraud and other illegal and criminal cases should be investigated and dealt with strictly and quickly in accordance with the law, and the application and enforcement of property punishment should be strengthened.

Under the regulatory "zero tolerance", financial fraud is a bad behavior, how to punish or sentencing, has become the focus of the market.

Counterfeiting all the year round

Data show that ST Special letter was listed on the main board of the Shenzhen Stock Exchange in 2000, and the company is one of the earliest state-controlled state-level high-tech enterprises in China to develop and focus on the development of optical fiber and cable, distribution network equipment and communication equipment.

ST's fraud dates back to April 2015, when ST announced the purchase of a 100 per cent stake in Dongzhi by paying cash and issuing shares from four counterparties, including Chen Chuanrong. At the same time, the counterparty promised that the cumulative net profit of the underlying company for the three years from 2015 to 2017 would not be less than 143 million yuan, and Chen Chuanrong further promised that the net profit of Special East Intelligence would not be less than 58.6 million yuan from 2018 to 2020.

On November 4, 2015, Special East Intelligence completed the equity change and became a wholly-owned subsidiary of ST. As of November 30, 2015, ST Special Information has included Special East Intelligence in the scope of the consolidated statement.

In order to fulfill the performance commitment, Special East Intelligence has taken the act of financial fraud.

During the period from 2015 to 2019, Special Dongzhi falsely reduced or increased operating costs by undercounting or delaying the purchase of customer materials and adjusting operating costs across periods.

From 2015 to 2018, Special Dongzhi falsely reduced operating costs by 10.3933 million yuan, 91.7346 million yuan, 56.2461 million yuan and 11.6292 million yuan respectively, and then increased operating costs by 64.9477 million yuan in 2019. In 2019, Special East Intelligence also falsely reduced its total profit by 21.0806 million yuan. These inflated or reduced profits accounted for 8.17%, 34.74%, 16.58%, 3.29% and 5.33% of the total profits disclosed by ST Special letter in the current period, respectively.

In 2019, Dongzhi made up its sales business with Shenzhen Youhua Communication Technology Co., Ltd., China Mobile Group Terminal Co., Ltd., by forging purchase orders and related logistics documents, resulting in a false increase of 328 million yuan in operating income, 284 million yuan in operating cost and 43.8671 million yuan in total profit.

The above actions led to a false increase of 10.3933 million yuan, 91.7346 million yuan, 56.2461 million yuan and 11.6292 million yuan in total profits of ST WeChat from 2015 to 2018, with a total increase of more than 170 million yuan in four years.

By means of inter-temporal adjustment of operating costs and fictitious business, special Dongzhi falsely increased or decreased income, operating costs and profits during the period from 2015 to 2019, resulting in false records in the annual report disclosed by ST Special letter during this period.

Zero tolerance

From the perspective of investors, severe penalties can maintain the fair, transparent and healthy operation of the market. Financial fraud not only threatens the operational stability of the company, but also harms the rights and interests of the majority of investors. Therefore, we should resolutely crack down on financial fraud and effectively safeguard the legitimate rights and interests of investors.

Before the implementation of the new Securities Law in 2019, regulators could only punish them according to the 2005 Securities Law, with a maximum fine of 600000 yuan.

Under the regulatory "zero tolerance" and "tusk with thorns", what role will the new securities law play?

According to the "opinions" newly issued by the Supreme Law, the Supreme Procuratorate, the Ministry of Public Security, and the Securities Regulatory Commission, we will adhere to the requirement of "zero tolerance" and strictly crack down on illegal and criminal activities of securities and futures in accordance with the law. Increase the intensity of investigation and punishment, insist on removal, arrest and litigation, strictly control the application of probation, increase the application and enforcement of property punishment, maximize the recovery of stolen goods, and improve the whole chain strike and omni-directional liability system.

In view of the financial fraud of the special message, the Shenzhen Securities Regulatory Bureau issued a series of fines, including a fine of 8 million yuan on the special message, and a total fine of 15.5 million yuan on eight persons involved in the case, including Jiang Qinjian, then chairman of the special message, Chen Chuanrong, then general manager of Dongzhi, and Yi Zongxiang, deputy general manager. The accumulated fine of the company and related personnel is 23.5 million yuan.

In the end, Shenzhen Securities Regulatory Bureau decided to give a warning to ST and impose a fine of 8 million yuan, Jiang Qinjian a warning and a fine of 4 million yuan, and a 10-year ban on the securities market. Chen Chuanrong was warned and fined 3.5 million yuan, and banned from the securities market for 8 years. Yi Zongxiang was warned and fined 2 million yuan, and banned from the securities market for 6 years. Yang Hongyu and Li Zengmin were warned and fined 1.5 million yuan respectively; Zhang Dajun, Wang Ling and Liu Ying were warned and fined 1 million yuan respectively.

Among them, the most noteworthy one is Chen Chuanrong, who leads the fraud.

According to information, in July 2023, Chen Chuanrong, Yi Zongxiang, Liu Ying and Wang Ling were arrested on suspicion of contract fraud and job embezzlement. ST letter said that the company is actively assisting the judiciary to seize property and strive to recover the stolen goods.

However, whether it will be able to "sit through the prison" in the end is still waiting for the final decision of the judiciary.