Visual China.
Haitong**(600837.)SH) investment banking business will be fined again. On January 29, the Shanghai ** Stock Exchange (hereinafter referred to as the "Shanghai Stock Exchange") announced the "Decision on Taking Regulatory Measures against Haitong ** Shares*** and Relevant Responsible Persons" and the "Decision on Circulating Criticism of Sponsor Representatives Yan Ying and Xie Dan". Among them, Yan Ying and Xie Dan, as the project sponsor representatives designated by Haitong**, did not perform their sponsor duties properly, and there were violations including insufficient verification of related parties, insufficient verification of income, and insufficient verification of gross profit margin and cost.
According to the Shanghai Stock Exchange, after on-site supervision, it was found that Haitong** had deficiencies such as obvious failure to perform its due diligence in the initial sponsorship business, failure to identify major risks of the project by the quality control core department of the investment bank, and imprudent due diligence checks. The responsible person was responsible for the company's aforesaid conduct and failed to practise its duties prudently and diligently. In view of the above-mentioned violations, the Shanghai Stock Exchange issued regulatory warnings to Jiang Chengjun, then head of Haitong**'s sponsorship business, Zhang Weidong, then head of kernel, and Xu Can, then head of quality control.
From the perspective of violations, the project is a second declaration project, the previous declaration reporting period is from 2017 to January to June 2020, and the second declaration reporting period is from 2020 to 2022, of which January to June 2020 is an overlapping paragraph. The Shanghai Stock Exchange carried out on-site supervision of the sponsor during the acceptance stage of the project, and the project has withdrawn its application, and the road to the second listing of the proposed IPO company has been terminated.
According to the SSE, the sponsor has the responsibility to fully verify whether the issuer meets the issuance conditions, listing conditions and information disclosure requirements. In view of the fact that the issuer had financial internal control issues such as the circulation of funds in vitro in the previous reporting period, and there were some overlapping paragraphs in the two reporting periods, the sponsor failed to exercise due diligence and due diligence in the circulation of funds in vitro of related parties and suspected related parties, and also failed to fully verify the issuer's revenue, gross profit margin and cost accounting, and failed to perform its duties and responsibilities. Yan Ying and Xie Dan, as sponsor representatives, are directly responsible for this.
For example, in terms of related party verification, according to the prospectus, the issuer had other payables to the controlling shareholder at the beginning of the reporting period1497170,000 yuan, but the reasons for the formation of the aforesaid large amount of payables were not disclosed in the application documents. The on-site supervision found that the issuer's other payables were formed due to the external capital circulation and customer payment collection in the previous reporting period, and the related parties and suspected related parties of the issuer during the reporting period of this declaration were highly related to the relevant entities of the above-mentioned extracorporeal capital circulation matters. The sponsor failed to exercise due diligence, failed to pay sufficient attention to the aforesaid related parties and suspected related party entities, and failed to effectively verify whether the issuer had an unliquidated extracorporeal capital circulation.
In terms of revenue verification, there were a number of mismatches between the timing of external acceptance orders and internal working hours records in the issuer's revenue recognition during the reporting period, and the sponsor failed to raise its duty of care in response to the above-mentioned circumstances, and failed to pay sufficient attention to whether the issuer had the risk of adjusting income across years and carry out effective verification.
The SSE proposed that Haitong** should effectively improve the quality of investment banking business, conduct internal accountability in strict accordance with the company's system, and submit a written rectification report to the SSE within 20 trading days from the date of receipt of the decision on the regulatory measures.
It is worth noting that this is the second fine Haitong ** has received this year. On January 5, in the process of acting as the sponsor of the IPO project of World Agricultural Machinery, Haitong ** failed to continue to perform due diligence duties on the freezing of the equity held by the actual controller and reported to the Shenzhen Stock Exchange in a timely manner, failed to fully verify the accuracy of the disclosure of related party capital loans, failed to pay sufficient attention to the imperfect accounting foundation and non-standard internal control of World Agricultural Machinery, and changed the prospectus without consent. In this regard, the Shenzhen Stock Exchange decided to take self-regulatory measures of written warning against Haitong**, and at the same time gave the sponsor representatives Chen Cheng and Jing Yang the punishment of circulating criticism.
The Blue Whale financial reporter paid attention to the fact that Haitong ** has repeatedly appeared in the past two years that the IPO project was "withdrawn after one inspection". Wind data shows that in 2023, Haitong** will have a total of 127 sponsored projects (including joint sponsors), and 23 sponsored projects will fail, of which 1 will be rejected and 22 will be withdrawn voluntarily, with a withdrawal rate of 1811%, the withdrawal rate ranks first among the top brokers.
In June last year, the Shanghai Stock Exchange imposed a regulatory warning on Haitong**. During the issuance and listing review and on-site supervision of practice quality, the Shanghai Stock Exchange found that Haitong ** had selectively omitted answers to important audit questions in the sponsorship of Huiqiang New Materials, Mingfeng Medical and Zhizhen Shares, and failed to verify the issuer's revenue recognition, inventory, procurement costs, capital flow and R&D expenses, and there were weak links in the internal quality control of the sponsor business.
Since June 2023, Haitong** has been subject to regulatory measures on several occasions due to the failure of sponsors to perform their duties. The regulatory authorities have repeatedly emphasized that sponsors should fulfill their responsibilities as "gatekeepers", strengthen "declaration is responsibility", and impose strict institutional constraints on the withdrawal of applications and the occurrence of similar problems in inspections.