was involved in the aftermath of the fraud case of LeTV. Recently, Ping An Securities was suspended from the Shenzhen Securities Regulatory Bureau for three months. Currently, many IPO companies for which Ping An Securities serves as sponsors have suspended review.
Ping An Securities recommended
A company in Shaanxi pressed the "pause button" for its IPO
Xi'an Xintong Pharmaceutical Research Co., Ltd. ("Xintong Drug") was listed on the Science and Technology Innovation Board and the review status was recently changed to (other matters). According to the Shanghai Stock Exchange website, the suspension was due to the sponsor of Xintong Drug being suspended by the Securities Commission as a sponsor institution. Therefore, the Shanghai Stock Exchange suspended the issuance and listing review. The sponsor of Xintong Drug is Ping An Securities.
It is worth noting that many companies in the IPO queue have recently pressed the "pause button" on their IPOs for the same reason.
On the same day, the review status of Weichi Technology and Yongsi Electronics, which were queued on the Science and Technology Innovation Board, was changed to "suspended". The reason was that the sponsor was suspended by the China Securities Regulatory Commission. The sponsors of these two companies are Ping An Securities.
It is worth noting that Weichi Technology and Yongsi Electronics have already launched IPOs before, and their IPOs have reached the registration submission stage.
In addition, Huahui Energy, which was listed on the GEM , was suspended from review by the Shenzhen Stock Exchange on June 23. According to the website of the Shenzhen Stock Exchange, the reason for the suspension is: Huahui Energy has been suspended as a sponsor by the Securities Commission due to the sponsor Ping An Securities Co., Ltd.
implements the registration system and 's Science and Technology Innovation Board and GEM. Recently, four companies' IPOs were suspended because Ping An Securities was suspended from sponsoring qualifications.
may be affected more than that. According to the initial stock review work process and application company status table disclosed by the Issuance Supervision Department of the China Securities Regulatory Commission, the application processes of Xinjiang Xinhua, Yalian Machinery, Huawei Technology, etc. that plan to be listed on the Shanghai and Shenzhen main boards have also been changed to "suspended." In the main board review of the approval system, although the reasons for the suspension of these three have not been announced, the sponsors are all Ping An Securities.
The aftermath of LeTV’s fraud case
Suspension of sponsorship qualifications for 3 months
Ping An Securities was established in 1995 and is a securities company under Ping An Group. The "2021 Brokerage Business Performance Indicator Ranking" released by the Securities Industry Association recently shows that Ping An Securities ranks 13th in total assets and revenue, and 16th in net profit. In 2021, Ping An Securities' underwriting and sponsorship business revenue was 956 million yuan, ranking 18th among securities companies.
Why was Ping An Securities suspended from sponsoring this time?
Public information shows that Ping An Securities was involved in the aftermath of the LeTV fraud case. Recently, Ping An Securities was suspended as a sponsor by the Shenzhen Supervision Bureau of the China Securities Regulatory Commission for three months. The suspension period is from June 23 to September 22, 2022.
According to an announcement from the Shenzhen Securities Regulatory Bureau, the penalty was mainly because Ping An Securities failed to conduct diligent due diligence and failed to implement the internal control mechanism in the process of sponsoring LeTV’s initial stock offering and listing on the GEM. The issuer’s financial statements in the issuance sponsorship letter issued The data is inconsistent with the actual situation and violates the relevant provisions of the " Securities Issuance and Listing Sponsorship Business Management Measures".
The Shenzhen Securities Regulatory Bureau stated that Ping An Securities should conduct in-depth rectification of the above-mentioned relevant issues, effectively improve the quality of investment banking business, and submit a written rectification report before the expiration of the suspension period.
LeTV was listed on the GEM in 2010. Soon afterwards, problems arose in some IPO projects of Ping An Securities. In 2013, Ping An Securities was suspended for three months from sponsoring the IPO of Wanfu Biotech, which was involved in the financial fraud case of Wanfu Biotech, and many people had their securities qualifications revoked. Subsequently, Ping An Securities began a major internal adjustment of personnel and structure, aiming to correct historical problems.
In March this year, Ping An Securities received a prior notice of administrative supervision measures from the Shenzhen Securities Regulatory Bureau. At that time, Ping An Securities responded: In the past ten years, the company has continued to establish and improve its internal control mechanism, and its compliance and risk control levels have continued to improve.
What’s next for the implicated company
? During the listing review of
, suspension and termination are abnormal circumstances. It should be noted that "suspension" does not mean "termination". Literally speaking, "termination" means that it has been completed and will not continue; "suspension" means that it has stopped midway and can continue.
Take the GEM and Science and Technology Innovation Board that implement the registration system as an example. As of June 28, a total of 30 companies have suspended their review. Except for several companies affected by Ping An Securities, most of the others have "financial information needs to be updated" or "affected by the epidemic." Intermediary related work”.
A reporter from the Chinese Business News noted that the 2022 mid-term report disclosure season is about to begin, and companies planning to be listed need to submit new financial data in a timely manner, and the impact of the epidemic on some companies in line in the first half of the year cannot be ignored.
Relatively speaking, Ping An Securities was suspended from sponsoring qualifications, which mainly affected the IPO progress of the sponsored company.
A brokerage person said that according to past experience, when the IPO progress is affected by the suspension of qualifications of sponsor institutions, there are two possible paths for the relevant companies: first, wait for the relevant agencies to end the punishment or explain the problem, and the regulators will review it again. Resume the review process; the second is to withdraw materials, change institutions, and re-apply for IPO.
The broker said that from a practical point of view, which path is more cost-effective depends on the listing plan of the relevant IPO company. For example, when changing the sponsoring securities firm, due diligence and various pre-declaration matters should be completed within the specified time. Of course, for companies that begin to apply for IPOs, all internal aspects are already very standardized. Huashang Daily reporter Li Cheng
