IPO Enterprise Violation And Punishment Investigation Report: Normalization And Strict Supervision

The tighter supervision of IPO will further enhance the standard of IPO declaration, maintain the normal order of IPO market, curb some of the projects that do not meet the requirements of listing, and borrow IPO to normalize the luck of reporting to enter the customs, thereby improving the quality of listed companies further.

Intern Tang Wan Yue, Zuo Jing Yi, Beijing

With the normalization of IPO after the Spring Festival, penalties for issuers related violations are falling.

In April 13th, the science and Technology Board announced that it had received the decision of the SFC's administrative supervision measures, and pointed out that in the process of applying for the IPO, there were two problems of information disclosure violation. Shi.

In fact, recent penalties for irregularities such as information disclosure in the IPO field are increasing.

? ? In twenty-first Century, according to the statistics of the economic report reporters, the penalties for IPO enterprises' violation were mainly divided into three categories: first, after the successful implementation of IPO, the offending penalties for violations were found; two, the violation problems found in the listing process, some of which had an impact on the progress of the listing, and some of the offending plots did not constitute obstacles to listing. Three, there are also some enterprises that fail to attend the meeting. The irregularities in the reporting stage are still subject to regulatory measures from the regulatory authorities.

In the view of the industry, regulators will tighten the supervision of IPO, which will further improve the standard of IPO declaration, maintain the normal order of the IPO market, curb some of the projects that do not meet the requirements of listing, and borrow IPO to normalize the fluke of reporting to enter the customs, thereby further improving the quality of listed companies from the entry point.

Punishment after IPO

For those who have successfully listed, the disclosure of information during their IPO period is ushered in the "liquidation" of regulatory authorities.

Rong Bai technology announced in April 13th that its decision on regulatory measures means that it is in the IPO stage of applying for the scientific creation board, and there are two illegal activities related to information disclosure in the prospectus.

First of all, Rong Bai technology did not fully disclose the substantial increase in credit risk of Beek power. Rong Bai technology has adjusted the Beek power credit line to 0 since July 1, 2019, but the prospectus (signing date is July 16, 2019) has not disclosed the matter and fully indicates the risk.

In addition, Rong Bai technology did not disclose the essence of Beek's "return payment", in order to repay overdue accounts with its own commercial acceptance bill.

In the prospectus, it was disclosed that as of June 25, 2019, the amount of Beek's power through bank acceptance bills, commercial acceptance bills and telegraphic transfers totaled 106 million yuan, and the repayment rate was about 49%.

In the above repayment, the commercial acceptance bill issued by Beek has a total of 70 million 28 thousand and 400 yuan, which accounts for 66.30% of the total refunds. However, it is not the case that Rong Bai technology does not disclose the payment.

Beek power was a power battery company in Shenzhen, but in the second half of 2019, it suffered a series of debt reactions from the downstream vehicle companies, which led to the impact of Rong Bai technology. At the same time, there were many listed companies such as hang Ke technology, new Zhou, and so on.

In fact, hang Ke technology also stepped on the thunder of Beek's risk letter. In April 13th, hang Ke technology also announced that it was regulated by the SFC's regulatory measures. It pointed out that there was a problem in its IPO declaration phase.

For example, hang Ke Technology failed to disclose the suspension of contract execution with Beek power and the possible risk of inventory depreciation. Meanwhile, the amount involved in the relevant contract for Beek's power suspension is inconsistent with the amount of advance payment disclosed in the prospectus.

It is worth mentioning that Rong Bai technology and hang Ke technology have been punished by the SFC for "no public issuance of securities within one year". In addition, the auditors of both companies are Tianjian certified public accountants, so the SFC also adopted the decision to give warning letters to Tianjian and Jin Dongwei, Ni Guojun and He Linfei.

"In fact, it is mainly a chain reaction caused by Beek's power credit risk exposure, while Rong Bai technology and hang Ke technology did not expose these problems in time at the level of information disclosure." An investment bank who is close to hang Ke Technology said, "but if Beek's power is not a problem, the letter may be hard to find. But with the increasing credit risk of some industries and companies, the IPO business and its scope of accountability that may be exposed in the future are worth noting."

For the listed companies in the IPO stage of irregularities, the two companies are no longer new.

In March of this year, the core technology that was listed in 2018 was issued by the CSRC and issued a warning letter as a result of the existence of "sealing up the volume before the approval of the IPO phase and the timely reporting of industrial policies which had not changed according to the relevant requirements in advance."

"Some companies have successfully listed, but if there are any irregularities such as information disclosure in the IPO stage, they will eventually be leaks out. Recently, the relevant penalties of the regulatory authorities have just explained this point. The issuer should not think that the flaws in the reporting process can be written off as long as they are successfully listed." An investment bank official close to the regulatory level said, "for the existence of irregularities, the departments concerned will still take strict measures to deal with them."

Punishment shock differentiation

There are also some companies that have been punished, and their IPO progress has been suspended or even rejected.

For example, in April 2019, Chuang Xin laser, which was launched by IPO, once passed the examination of the Shanghai Stock Exchange's municipal Party committee, and submitted its registration application in December 2019, but it still remains at this stage.

In the course of the audit, the Shanghai stock exchange received a letter of complaint, which means that Jiang Feng, chairman of the company, adopted the third party control of the invisible Party of the company, Shenzhen Ai Ke as the laser technology Co., Ltd. (hereinafter referred to as "Ai Ke"), and a decision paper on regulatory measures in March of this year carried out the "responsibility" for Chuang Xin laser.

? ? ? The decision pointed out that during the first verification of the matter by the Shanghai Stock Exchange in July 11, 2019, the intermediary staff conducted an interview with Chiang Feng, and Chiang Feng did not really explain the actual control relationship between him and Ai Ke. He said that Xin Xin laser and Ai Ke were a cooperative relationship, and once said that the answer was true, accurate and omission, and the agency submitted the first letter of complaint. The verification reply also indicated that the report was not true. AI could not be a company controlled by third people by Chiang Feng. When he communicated with the Shanghai Stock Exchange on 18 July 2019, Chiang Feng continued to deny the fact that he could control AI.

The exchange conducted a two degree verification in August 27, 2019, and expanded the supplementary evidence materials and verification scope. Under the pressure of the Shanghai Stock Exchange's verification, Chiang Feng finally confirmed the fact that he passed the third party's control of Ai Ke, and the SFC took charge of the supervision and management measures for Chuang Xin laser and Jiang Fengcai.

"Although love can be a small asset, the amount of related transactions in the reporting period and your company is only a little over ten million, which has little impact on your company's production and operation, and your love is already in the process of cancellation." The above regulatory measures stated that, "however, Jiang Feng kept concealing the fact that AI could be the case before the verification of the second reporting letter. The subjective intent was obvious, resulting in the omission of the information disclosure of related parties and related transactions in your prospectus (Draft), and the main responsibility for violations."

"The problem of Chuang Xin laser is not to cover up the facts of related transactions, but to check the verification of the regulation is still denying the relevant facts. If we do not disclose the related transactions may be a work mistake, but in the face of the check concealment, there will be a letter in the subjective intent of the violation, and the quality is even worse." Bao Dai, a large investment bank in Shanghai, said, "this dishonest behavior has great harm to both the governance of listed companies and the authority of market supervision. The company obviously needs to explain this problem and take corresponding corrective measures. "

In fact, there were also companies who had been punished in the IPO audit stage, and eventually led to the rejection of the case. For example, in January this year, Carmen apparel encountered a veto at the meeting stage. 5 months ago, the company received the punishment measures of the supervision letter because of the problems such as flushing, self purchase, internal control of fixed assets, personal account payment or expenses, failure to fully offset the unrealized profits in the internal transactions, the existence of defects in the inventory and its impairment.

"For some issuers with obvious flaws in internal control and information disclosure, there are still large uncertainties and variables in the final listing of the issuers." The insurance representative said, "because in the view of regulation, the loopholes in the company's management may not be suitable for a listed company temporarily, and the relevant companies must make more thorough rectification in governance."

However, it does not mean that all penalties will lead to the abortion of issuers. For example, it was punished in July 2019. The reason is that there is a lack of financial expenses, inaccurate recognition of government subsidies, and inadequate disclosure of credit policies for individual customers in 2015 to expand the impact of sales on current business performance, but it is still successful in February this year.

"Some companies have been punished, but their violation is relatively mild. More financial data errors and other related problems, or related policy issues, will not affect their listing requirements. There may be only targeted penalties, but the progress of the listing will not be affected." "Such targeted measures also reflect the trend of IPO regulation with information disclosure as the core," Bao Dai said.

Those who fail must be punished.

In addition to the issuers listed and listed, some companies that even confirm the listed abortion are still being held accountable.

For example, in August 2019, Heng An Jiaxin encountered a "no registration" decision in the registration and registration phase, but only two months later, it had ushered in the warning punishment of regulators.

According to the decision on regulatory measures, Heng An Jiaxin is believed to have confirmed that its revenue exceeded 137 million yuan at the end of 2018, which resulted in an increase of 78 million 270 thousand yuan in current profits, and the Commission did not agree that the issuer identified the accounting error as "special accounting treatment".

"Mainly related to the relatively large amount of money, are major contracts, in fact, suspected of accounting treatment through irregular ways to beautify the audit cycle of financial information." A person close to Heng An Jia Xin said, "the final adjustment has been confirmed irregularities, which has led to the abortion of Heng An Jiaxin."

Although Heng An Jiaxin sprint board failed, it was still responsible for its failure. The reason is that when the company declared to be listed, its regulatory requirements were convergent with the listed companies.

"When a company is declared to be listed and accepted for a moment, the relevant requirements of the issuer will be equivalent to that of a listed company. Even if you are listed or rejected, you will still need to be punished for any problems you find in the declaration phase." The above representative said.

In fact, some companies have chosen to take the initiative to lose, but it is still difficult to escape regulatory accountability. For example, Lu Hua Hong brook chose to withdraw materials in January last year. However, six months later, it still received regulatory tickets, because the failure to disclose the environmental protection irregularities that continued to operate and operate after the expiration of the discharge permit and the disclosure of loans through related parties, as well as the revenue recognition policy, the third party's reimbursement and patent technology and trademark acquisition, were inconsistent with the facts.

For example, Dako has chosen to withdraw its first application in the IPO process in 2018, but even after 1 years, it still received a warning letter from the SFC.

According to the SFC, there is discrepancy between the income confirmation and the original outgoing records during the accounting period of Dako's new accounting. The purpose is to adjust the income during the accounting period, pay the purchase rebate by cash in cash, instruct some individual suppliers to trade with others in the name of others, and the actual controller occupies the company's funds.

In the view of the industry, regulators have taken strict supervision over the pre, post and intermediate events in the IPO process, and adopted corresponding regulatory measures to identify the problems, which will further improve the standard of IPO declaration and help further improve the quality of listed companies from the entry point.

"Whether the listing is successful or not, which stage of the listing process has been reached, even if the enterprises take the initiative to withdraw the material, the regulatory authorities have conducted verification according to the regulations and adopted strict supervision over the problem of discovery, which has improved the normalization of the IPO market." A close to the regulatory level of investment bankers pointed out that "from the violation of the circumstances, most of the offenders have problems in the letter, and in the information disclosure IPO system reform tackling key issues, these penalties are very timely."

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