China Securities Construction Investment has been a bit "in a hurry" recently. Issues such as the issuance of erroneous prospectuses, the lack of due diligence exposed in the Zijin Storage incident, the suspected insider trading, and the termination of the "bid-bypassing" business are all closely related to the company's internal management and risk control.
In the financial field, especially in the fierce competition in the capital market, the effectiveness of internal management, the accuracy of decision-making and the strictness of risk control are the key factors affecting the performance and market reputation of enterprises.
If there are deficiencies in internal management or imperfect risk control system, it may lead to the weakening of the company's execution and decision-making errors, which will ultimately affect the overall operation of the enterprise and the performance of external business. 
The SSE reminds of the staggered prospectusRecently, the Shanghai ** Stock Exchange sent a "small note" to Nanjing Zhongshan Asset Management Group, telling him that he had "staggered operations".
The "prospectus" of the corporate bonds that should have been submitted was mistakenly passed on to the "statement of the lead underwriter" of another company, and after an "outrageous" operation, the lead underwriter China Securities Construction Investment was posthumously questioned by the exchange.
On January 22, the Shanghai Stock Exchange sent the second review feedback on Zhongshan Asset's public issuance of corporate bonds to professional investors and listing application documents. The "Prospectus" of Zhongshan Assets should have been uploaded, but China Securities Construction Investment, as the lead underwriter, uploaded the signature page of the "Lead Underwriter Statement" of the Nantong Chongchuan Urban Construction and Development (Group) ** Bond Offering Form.
In response to this low-level error, the SSE wrote in the review feedback that "the prospectus submitted in response to this feedback is not the project document, please re-upload it after verification by the lead underwriter". At the same time, the SSE requires the lead underwriter to explain the reasons for the error in the uploaded documents and verify the authenticity, accuracy and completeness of the full set of application materials. And emphasized that "the lead underwriter kernel and quality inspection departments are requested to strengthen the quality control of the application materials." ”
According to public information, at the end of 2023, Zhongshan Assets will apply for the issuance of corporate bonds on the Shanghai Stock Exchange, with the lead underwriter being China Securities Construction Investment and the joint underwriter being Huatai United, which plans to issue 2 billion yuan of corporate bonds, and the issuer's credit rating is AA+. Another project that has been confused, Chongchuan C&D, also applied for the issuance of corporate bonds in November 2023, and the project plans to issue 1.7 billion yuan, and the lead underwriter is also China Securities Construction Investment.
It is worth mentioning that both projects are led underwriters by China Securities Construction Investment, and their bond issuance and filing time are very close, which has caused all kinds of speculation in the market.
Some speculate that this may be due to forgetting to save new changes when making modifications using a certain template, or uploading the wrong document when submitting a file.
And this is not the first time. As early as March last year, the Beijing Securities Regulatory Bureau pointed out that the Beijing Securities Regulatory Bureau disclosed an administrative penalty decision showing that China Securities Construction Investment ** was ordered to take corrective measures. According to the penalty decision, after investigation, there are the following problems in the process of carrying out debt undertaking business: first, the internal control of investment banking business is not perfect, and the quality control and core control are not strict; Second, the work standardization is insufficient, and there are low-level errors in the documents reported by individual projects; Third, the performance of entrusted management is insufficient. 
Amethystum Storage exposes the due diligence capabilities of China Securities Construction Investment
Due to the fraudulent issuance and information disclosure violation case involving Amethystum Storage, China Securities Construction Investment has attracted great attention from market regulators and investors.
The Amethystum Storage case was a serious case of fraudulent issuance, and Amethystum Storage made false statements in the prospectus of its initial public offering (IPO). It falsely inflated its operating income and profits by fabricating sales contracts, forging logistics and acceptance documents, etc.; Failure to disclose the balance of external guarantees as required not only led to criminal penalties for the company's senior management, but also caused the company to face the consequences of delisting.
From a regulatory point of view, as the sponsor and lead underwriter of Amethystum Storage, CSC** bears an unshirkable responsibility in reviewing the quality and compliance of information disclosure of listed companies. This incident has exposed possible negligence or deficiencies in CSC's due diligence and risk control.
The attitude and final decision of the regulator will be an important indicator to evaluate CSC's future risk management capabilities.
On December 29, 2023, the China Securities Regulatory Commission (CSRC) signed commitment recognition agreements with the four intermediaries involved in the Amethystum Storage case. In the case of amethystum storage, four intermediaries were punished by the China Securities Regulatory Commission for suspected illegal actsThe fine of 1.4 billion yuan, to a certain extent, reflects the heavy responsibility it bears in this incident. Grant Thornton, Rongcheng and Guangdong Hengyi Law Firm were also fined accordingly according to the extent and consequences of their respective violations.
In addition, the four intermediaries were required to pay about 11.79 million yuan for the losses not received by eligible investors in the advance compensation. According to the calculation of China **Investor Protection ** Co., Ltd. (hereinafter referred to as the "insured company"), the total loss of investors in this case is 10More than 9.7 billion yuan, of which about 10$8.6 billion has been compensated to eligible investors, and the remaining about $11.79 million has not been collected by eligible investors, and this part of the amount still has to be paid jointly by the four intermediaries.
The four intermediaries carried out self-examination and rectification in accordance with the rectification requirements put forward by the China Securities Regulatory Commission, seriously investigated the responsibility of the responsible persons and took internal disciplinary measures, strengthened their compliance and risk control management capabilities, effectively improved the quality of practice, and submitted a written rectification report to the China Securities Regulatory Commission, which was verified and accepted by the China Securities Regulatory Commission.
Since the beginning of this matter, China Securities Construction Investment** has realized the seriousness of the problem, and said in the announcement that it has begun a comprehensive self-examination and rectification.
In addition, China Securities Construction Investment Co., Ltd. sponsored IPO projects such as Poten Environment and Xintianxia, or there were financial frauds and inflated increases during the supervision period.
The company is actively responding to the requirements of the regulatory authorities and striving to improve the quality of practice in order to meet the new requirements of the upcoming comprehensive registration-based reform of ** issuance. However, it remains to be seen whether these efforts will be sufficient to repair its reputation and prevent similar incidents in the future. 
Insider trading exposes management loopholes
Last year, the Beijing Securities Regulatory Bureau issued an administrative penalty announcement, which attracted widespread attention in the market. According to the announcement, Liu Jiayin illegally traded Cuiwei shares during the period when he grasped the inside information of Cuiwei's proposed acquisition of Haike Rongtong. After investigation and trial, Liu Jiayin's behavior was determined to be insider trading. According to the relevant laws and regulations, Liu Jiayin was not only confiscated about 1190,000 yuan, and was also fined 3560,000 yuan fine, a total of 4750,000 yuan.
It is mentioned in the penalty decision that Liu Jiayin's ex-husband Liu Mou3 participated in the relevant meetings of Cuiwei's acquisition of Haike Rongtong project as the project leader of China Securities Construction Investment, and was an insider of inside information.
The case involved the project leader of CSC, which should take greater responsibility for internal risk control and compliance education as a leading brokerage firm in the industry.
After all, the establishment of corporate culture and internal supervision mechanisms is of great significance to prevent illegal acts such as insider trading. The punishment of this insider trading incident is a microcosm of the process of legalization of the capital market. For leading brokers, in order to maintain a leading position in the fierce market competition, they need to continuously improve their comprehensive strength and market reputation. Securities firms must establish a sound risk management system, including the management of market risk, credit risk, operational risk, etc., to ensure that risks can be effectively identified, assessed, monitored and controlled. 
Terminate the "standard bypassing" business
China Securities Construction Investment Co., Ltd. announced on the 19th that in order to strengthen the risk management of margin financing and securities lending business, from January 22, 2024, investors will be prohibited from repaying securities lending contracts through financing.
According to the notice, in order to strengthen risk management and prevent the risks of the two financial services, the company decided to prohibit financing *** from being used to repay securities lending liabilities, that is, cash securities are not allowed to be repaid when the cash bond position in the credit account is less than the number of financing contracts. This adjustment will take effect from January 15, 2024.
In other words, China Securities Construction Investment will become the second company to stop "bypassing the standard" after GF.
The so-called "two financial cash-outs" refers to the behavior of investors using the margin financing and securities lending business provided by ** company to carry out a series of operations to arbitrage cash. Specifically, investors can obtain funds through such bid-ask spread operations by selling these ** for cash, or by using securities borrowing and lending to sell and then repay the bonds. This practice is often used to purchase non-margin underlying** (i.e., "bid-by-labeling" transactions) or to transfer funds out of the credit account for other purposes.
In essence, the "two financing and cash-out" is an intentional bypass of regulatory provisions by investors, which violates the original intention and rules of margin financing and securities lending business. This kind of behavior may disrupt the normal market order, increase systemic risk, and may involve violations of laws and regulations, so regulators usually strictly monitor and crack down on such behavior.
In fact, the so-called "bid-bypassing" business has long been an area that is too risky for smaller brokerages to touch, because once they are detected with problems, they may find it difficult to bear the consequences. In contrast, due to the large scale of operation and stronger risk tolerance, large brokerages often only need to bear the consequences of some points deduction in the face of the same inspection, so there are still many large brokerages who continue to conduct such business in secret.
From the 2023 quarterly report, it can be seen that the performance of China Securities Construction Investment** is slightly inferior to that of 2022 in both bond underwriting and equity underwriting. In 2022, the company completed 79 equity financing projects, with a lead underwriting amount of RMB 133.3 billion. Among them, there were 41 IPO lead underwriters, with a lead underwriting amount of RMB 5870.6 billion.
In 2022, there will be 38 lead underwriters of equity refinancing, with a lead underwriting amount of RMB 7468.2 billion yuan, ranking third in the industry. The company sponsored 4 IPO projects of central enterprises, ranking first in the industry for four consecutive years; Firmly focusing on the national strategy to carry out business, the services include JinkoSolar, Huaqin Technology, Weijie Chuangxin, First Pharma Holdings, iSoftStone, AVIC UAV, Sinosteel Luonai, Yuncong Technology, Yandong Micro and a large number of scientific and technological innovation enterprises that support major national strategies to go public; We continued to contribute to the promotion of green development, and exclusively sponsored and led the underwriting of the RMB 45 billion private placement project of CATL, the world's leading new energy company, which is the largest refinancing project since the implementation of the registration-based system. At the same time, the company has also completed more than 10 green equity financing projects such as JinkoSolar, Azure Lithium Core, Mingguan New Materials, and Jinkai New Energy.
In addition, in 2022, CSCI completed 19 convertible bond projects, with a lead underwriting amount of RMB 3972.3 billion yuan, ranking first in the industry in terms of the number of completed families.
In terms of bonds, in 2022, CSCI completed a total of 2,501 bond lead underwriting projects, with a lead underwriting scale of RMB 13,067$6.2 billion. Among them, there were 789 corporate bond underwriting projects, with a lead underwriting scale of RMB 4,342$1.9 billion.
According to the third quarter report of 2023, the bond underwriting situation, *underwriting** 15.2 billion yuan, a significant decrease from the end of 2022.
In the field of investment banking business, China Securities Construction Investment** has maintained a certain leading position. According to wind data, a total of 313 companies in the A** market will be listed and issued in 2023, and China Securities Construction Investment ranks second in the industry with the number of underwriting of 33 companies, and the IPO underwriting sponsorship income is as high as 238.5 billion yuan. In terms of the number of project reserves, China Securities Construction Investment is also second only to CITIC**, with a total of 60. At the same time, in 2023, as many as 20 IPO projects will be withdrawn by CSC, including one company that failed to pass the listing review. In the field of equity underwriting, the scale of equity underwriting of China Securities Construction Investment reached 11230.8 billion yuan, ranking third in the industry, and the number of underwriting companies is 82.
* In terms of business, China Securities Construction Investment** is slightly inferior. As a member of the public offering of securities companies, there are indeed certain differences between China Securities Construction Investment and its parent company, China Securities Construction Investment**, which has a prominent position in the industry.
In recent years, the public offering of securities companies in the mainland has developed rapidly, and many of the top public offering companies are securities companies. However, not all the ** companies under the brokerage company are developing smoothly, and China Securities Construction Investment ** is one of the examples. As of June 30, 2023, CSC** had total assets of RMB79.3 billion yuan, net assets of 66.8 billion yuan, with a total operating income of 172.5 billion yuan, net profit of 3,655 yuan410,000 yuan.
The investment banking segment achieved a total operating income of RMB262.4 billion yuan, a year-on-year decrease of 552%。
According to the third quarter report, the compensation payable to employees was 588.9 billion yuan, compared to 434.9 billion yuan, much higher, is not affected by the current salary cut in the financial industry. end
Thanks for readingScan***