China-Germany Securities issued a warning letter due to the Taiyuan Heavy Industry project. What is General Manager Wan Jun's opinion?

Operator Finance Network Qizhen / by

The Shanghai Regulatory Bureau of the China Securities Regulatory Commission recently disclosed multiple administrative enforcement decisions. Several securities firms and relevant executives were named. Among them, Zhongde Securities was issued a warning letter due to its project involving Taiyuan Heavy Industry Co., Ltd. (referred to as “Taiyuan Heavy Industry”). Operator Finance Network will also sort through this round of penalties.

It is understood that Zhongde Securities mainly had the following two types of violations:

First, as the sponsor for Taiyuan Heavy Industry’s 2020 private placement of shares and the listing project, its due diligence was not sufficiently thorough regarding matters such as Taiyuan Heavy Industry’s large accounts receivable, large prepayments, and financial expenses. In addition, some due diligence and ongoing supervision work papers were not filed in a timely manner.

Second, as the joint lead underwriter for Taiyuan Heavy Industry’s 2022 private placement corporate bond project, its due diligence was not sufficiently thorough regarding matters such as Taiyuan Heavy Industry’s important subsidiaries, major customers, and suppliers. Some due diligence work papers were also not filed in a timely manner.

The above circumstances violated multiple relevant management measures and regulations, reflecting inadequate compliance and risk control at Zhongde Securities. It was issued a warning letter by the Shanghai Municipal Securities Regulatory Bureau, and it was also required to make rectifications for the issues found, with serious accountability for relevant responsible personnel.

As of now, Zhongde Securities has not publicly responded to this penalty. Zhongde Securities currently has relatively few executives. The general manager, Wan Jun, holds multiple positions at once, including the board secretary, the financial officer, and the chief operating officer. It’s unclear what Wan Jun thinks about this penalty.

In response, Liu Ping, deputy editor-in-chief of Operator Finance Network, said that Zhongde Securities is a joint-venture securities company established with joint investment from Shanxi Securities and a foreign party. Tianyancha shows that Shanxi Securities holds 66.7% of the equity in Zhongde Securities. Most executives, including general manager Wan Jun, have work experience at Shanxi Securities.

(Editor: Qizhen)

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