Original title: Using other people’s accounts to buy and sell their own stocks for more than 500 million profits, Jiuding Group was fined 600 million yuan by the China Securities Regulatory Commission
Reporter | Hu Yingjun
Jiuding Group (430719.OC), the former leading NEEQ stock, was investigated by the Securities Regulatory Commission for alleged violations of the letter and disclosure regulations.
On the evening of January 14, Jiuding Group issued two announcements to disclose that it had received two fines. One of the announcements disclosed that the company received the “Pre-Notice of Administrative Punishment from the China Securities Regulatory Commission” yesterday, because it used other people’s accounts to engage in securities transactions. The Securities Regulatory Commission decided to order TongchuangJiuding InvestmentHolding Co., Ltd. made corrections, confiscated 501 million yuan of illegal income and imposed a fine of 100 million yuan; Wu Gang, executive director of Jiuding Holdings and chairman of Jiuding Group, was warned and fined 100,000 yuan.
In addition, since Jiuding Group deliberately concealed the number of shareholders who actually subscribed for the private placement of shares in 2014, and was suspected of illegal information disclosure, the China Securities Regulatory Commission decided to order the company to correct, give a warning, and impose a fine of 600,000 yuan. ; Warned Wu Gang and fined 300,000 yuan; Huang Xiaojie, Qin Zhengyu, and Gu Zhipeng were warned and fined 100,000 yuan respectively; Cai Lei and Wu Qiang were warned and fined 50,000 yuan respectively.
It is worth noting that Jiuding Group disclosed in the announcement the specific details of illegally using the accounts of others to speculate in its own stocks.
The announcement disclosed that Jiuding Holdings had used five securities accounts such as “Qian Guorong” to purchase 413 million shares of Jiuding Group’s private placement.
From August 12, 2014 to April 16, 2015, Wu Gang, chairman of Jiuding Group, instructed relevant personnel to specifically operate “Qian Guorong” and other 5 securities accounts to sell “Jiuding Group” for 375 million yuan through the National Equities Exchange. Shares, the profit exceeded 68 million yuan.
Before the implementation of the fixed increase of Jiuding Group in June 2014, Jiuding Holding used its “Fengyuan” securities account to hold 32 million shares of “Jiuding Group”. From May 25th to 26th, 2015, Jiuding Holdings used the “Fengyuan” securities account to sell 21 million shares of “Jiuding Group” through the National Equities Exchange. The actual profit of the transaction was 433 million yuan.
In other words, from August 12, 2014 to May 26, 2015, Jiuding Holdings controlled five securities accounts such as “Qian Guorong” to speculate its own stocks, with a total profit of over 500 million yuan.
In response to the above-mentioned violation facts and punishment results, Jiuding Group’s secretary of the board Wang Liang said in an interview with the interface news reporter: “We sincerely accept the punishment from the Securities Regulatory Commission and will reflect on it and actively rectify it. This punishment is a good medicine for us. Contribute to the healthy development of the company. The company will take this as a warning to strengthen learning, strictly abide by the capital market laws, regulations and rules, adhere to legal compliance, sunny and transparent operation, and achieve high-quality development.”
Wang Liang said that the company has undergone transformation and rectification in the past few years: in 2018, it established the development strategy of “de-finance, deleveraging and focusing on investment in the main business”; at the same time, it strengthened system construction, upgraded compliance and control procedures, and regularly trained and inspected.
It is understood that in 2019, Jiuding Group sold its Hong Kong Fortis Insurance to Chow Tai Fook Group, and used most of the cash returned to repay loans, greatly reducing the debt-to-asset ratio.
According to the annual report data, as of December 31, 2019, the actual debt-to-asset ratio from the perspective of Jiuding Group headquarters was as low as 12%. According to Jiuding Group, the company has established several basic principles of “deleveraging”: First, to maintain a low debt structure for a long time, the actual asset-liability ratio from the headquarters’ perspective does not exceed 20%, and strive for zero debt most of the time; Issuance of medium and long-term credit bonds is the method of debt; third, the amount of short-term debt is not more than 50% of the highly liquid assets held by the headquarters.
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