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Listed company executives are careful! Financial fraud, cutting leeks must be severely punished
China Fund News
For a long time, listed companies’ financial fraud, false statements and other information disclosure violations have been criticized, and they have also caused damage to the interests of shareholders and the stable and healthy development of the capital market.
The 2019 National Conference, which is being held, brings good news to A-share investors. Two representatives of the meeting proposed a motion to increase the amount of punishment for illegal disclosure of information on listed companies, and it has been formally adopted. This also means that heavy penalties for “financial fraud” and “cutting amaranth” will be incorporated into the legislative work of the National People's Congress.
In addition, Wang Jianjun, deputy of the National People's Congress and general manager of the Shenzhen Stock Exchange, said in his deliberation on the two high reports that it is necessary to raise the cost of illegal crimes in the capital market, severely punish fraudulent issuance of stocks, change the system of fines and confiscation, and give priority to fines to investors.
Heavy penalties for listed companies' "financial fraud" and "cutting leeks" proposal were adopted
According to Article 193 of the Securities Law, if the issuer, listed company or other information disclosure obligor fails to disclose information according to the provisions, or the disclosed information has false records, misleading statements or major omissions, the relevant responsible subject A fine of 300,000 yuan to 600,000 yuan may be imposed.
Zhu Jiandi, deputy of the National People's Congress and chairman of Lixin Certified Public Accountants, submitted a proposal saying that in view of the fact that the maximum fine amount of listed companies is not sufficient to deter the information disclosure of listed companies, it is proposed to amend the Securities Law to increase the amount of fines for listed companies. At the same time, introducing criminal responsibility, "to make the counterfeiters pay the price."
Zhu Jiandi believes that listed companies may achieve huge illegal interests by implementing financial fraud, such as fraudulent acquisition and listing conditions, avoiding delisting and ST. However, the penalty amount of up to 600,000 yuan does not match the severity and income of the listed company's financial fraud, resulting in a lower cost of information disclosure by listed companies.
For example, in the case of Harbin Electric Group Jiamusi Motor Co., Ltd.,Jiadian sharesThe total profit for 2013 will be increased by RMB 158,437,287.54, and the total profit for 2014 will be increased by RMB 39,942,583.68, and the total profit for 2015 will be reduced by RMB 198,379,871.22. In 2013, the amount of false increase will be 264 times of the fine.
Moreover, the penalties imposed on listed companies are even less penalized by intermediaries.
According to the provisions of Article 223 of the Securities Law, if the documents produced or issued have false records, misleading statements or major omissions, the securities service institution may be fined more than one time but not more than five times the business income. The severity of such penalties is sometimes even higher than that of listed companies.
Zhu Jiandi counted the amount of punishment received by the accounting firm and related listed companies from September 2013 to January 2019 for failing to disclose information as required, or the information disclosed was falsely recorded, misleading or grossly omitted. The results show that as of January 9, 2019, the accounting firm was sentenced to 47 cases by the China Securities Regulatory Commission, and there were 42 cases of penalties for listed companies and accounting firms. Among the 26 cases, the punishments imposed by accounting firms were heavier than those of listed companies. Even the sum of the confiscation of business income and fines imposed by the three accounting firms is 10 to 15 times the fine imposed on the listed company.
At present, the Standing Committee of the National People's Congress has formally adopted the Zhu Jiandi representative's motion, which also means that the heavy punishment of "financial fraud" and "cutting amaranth" will be included in the legislative work of the National People's Congress.
The market is hotly talking about "Zhao Wei who cuts the leek!"
In fact, more than one representative is concerned about the low cost of illegal violations disclosed by listed companies. Another representative is the chairman of Shanghai Fushen Evaluation Consulting Group Co., Ltd. and the vice chairman of the Shanghai Federation of Industry and Commerce Fan Wei. Similar comments were also made.
In the face of the new chairman of the China Securities Regulatory Commission, Mr. Fan said: To crack down on fraud and manipulate the stock market is not only a punishment for the company’s mandatory delisting, but also an increase in personal supervisory standards, especially in enterprises. The punishment of the management personnel, the confirmation of violations of laws and regulations, the implementation of heavy penalties, aggravating the sentence, the loss of the bottom, dumping the family, so that there is deterrence. At present, there are only 600,000 penalties imposed by the securities law, which has proved that the problem cannot be solved. Like Zhao Wei cut the leeks, earned hundreds of billions, more than one crime, add up, only to pay 700,000 yuan.
Therefore, it is necessary to amend the relevant laws and regulations to severely punish illegal letters, so Fan Wei once again suggested: To be honest, under the disputes of all parties, the revision of the securities law will not be issued until the monkey year. Whether it is possible to introduce regulations, departmental regulations, and flexible and timely guidance of the stock market.
It is reported that although Yi Huiman did not respond to Fan Wei’s suggestion on the spot, at 7 o'clock that night, the staff of the China Securities Regulatory Commission contacted Fan Wei through the Shanghai delegation, hoping to obtain a written text of her deliberation and said that it would Study these recommendations carefully.
In this regard, the People’s Daily published a microblog on March 9th, “Zhao Wei who managed to cut the leek!” In the face of the chairman of the CSRC, the NPC deputies voiced the voices of the shareholders and talked about the idea of regulating the market. To overcome the flicker, what is needed is this kind of "no flickering". Go straight and solve problems and you can take fewer detours. Sharp "fire", more precise targeting. More land and sound, less monkeys, good voices can become a good system, good policy.
On the 9th, the National People's Congress held a press conference to answer questions on the "National People's Congress Legislative Work". At the meeting, Wu Ritu, deputy director of the NPC Financial and Economic Committee, said that the "Securities Law" was being accelerated.
"Little Swallow" Zhao Wei couple is planning to acquire a listed company with a shell company through 50 times high leverage, claiming to contribute 3 billion yuan, actually only 60 million, and there are false records, misleading statements and major omissions in information disclosure. Violation of the law.
After the CSRC identified the problem, it quickly stopped and sentenced Zhao Wei and his responsible persons to a fine of 600,000 yuan for the two companies. A fine of 300,000 yuan was imposed on the responsible persons of Huang Youlong and Zhao Wei, respectively. Zhao Wei et al. adopted a five-year ban on securities market.
Obviously, such a fine is not too high, nor can it satisfy the majority of shareholders. However, it is already a "top penalty" under the current rules. It also raises the discussion on whether the Securities Law should be amended.
In addition, the investors who were “cut the leeks” filed a civil lawsuit against the relevant company and the Zhao Wei couple. In January, 17 investors suedXiangyuan CultureThe false statement of the securities won the case, and Zhao Wei was jointly and severally liable.
This year, a number of companies were investigated for financial problems.
In fact, since 2019, a number of A-share companies have been investigated for financial reasons. February 19,Liyuan RefinementThe announcement was issued, and the company was investigated by the Securities and Futures Commission for alleged violations of information disclosure.
In 2018, Liyuan received 6 inquiries and letters of concern from the Shenzhen Stock Exchange. In the year of 2019, after the announcement of the 2018 annual results forecast, the letter of attention was received again - the small and medium-sized board concerned letter  No. 94, paying attention to the annual performance forecast. Among them, on October 11, 2018, in the reply to the exchange inquiry letter, Liyuan Refined recognized the company's financial fraud.
On January 22, Kang Dexin (002450) announced that it was suspected of information disclosure violations and was investigated by the China Securities Regulatory Commission. Earlier, the Shenzhen Stock Exchange issued an inquiry letter requestingST Conde NewExplain the location of the book currency funds, the existence of large amounts of money but the reasons for bond defaults, and self-check whether there is financial fraud.
Earlier, many A-share companies were fined for financial fraud.
According to the China Times, listed companies suspected of financial fraud deserve special attention in cases involving suspected violations of the rules, and conducted an inventory of 11 A-share companies involved in 2018:
The regulatory mechanism is gradually improving
Statistics show that since 2019, including the China Insurance Regulatory Commission, the China Securities Regulatory Commission, and the Shanghai Stock Exchange, Shenzhen Stock Exchange and other institutions have issued a total of 281 violations of penalties, involving 148 A-share listed companies. The number of violations and the number of companies involved increased by 76.73% and 19.35% year-on-year.
Among them: there were 4 cases that did not disclose regular announcements on time, 63 cases that did not disclose major events of the company in time, 224 cases of other duties were not performed according to law, 27 cases of false or misleading information disclosure, and the results of performance prediction were inaccurate or not timely. 11 cases (some listed companies involved a number of violations).
In the same period of 2018, including the China Insurance Regulatory Commission, the China Securities Regulatory Commission, and the Shanghai Stock Exchange and the Shenzhen Stock Exchange, a total of 159 violation penalties were issued, involving 124 A-share listed companies.
Among them, there were 80 cases that did not disclose the company's major events in a timely manner, 105 cases of other duties were not performed according to law, 36 cases of false or misleading information disclosure, and 6 cases of inaccurate performance results (some listed companies involved multiple violations) ).
In terms of fines, since 2019, the regulator has imposed a fine on 152 violations, with a total fine of 116 million yuan. The number of fines for violations increased by 375.00% year-on-year, and the amount of fines for violations decreased by 77.03% compared with last year.
In the same period of 2018, the regulator made a fine decision on 33 violations, with a total fine of 505 million yuan.
It can be seen from the above-mentioned punishment data that the cracking of the supervision of the listed companies on the illegal activities of the listed companies is constantly escalating, and the relevant regulatory systems are also being improved.
General Manager of Shenzhen Stock Exchange: raising the cost of crime and giving the fine to investors
Wang Jianjun, deputy of the National People's Congress, general manager of the Shenzhen Stock Exchange and deputy secretary of the party committee, said in his deliberation on the two high reports that it is necessary to raise the cost of crimes in the capital market, severely punish fraudulent issuance of stocks, change the system of fines and confiscation, and give priority to the investors. Not all turned over to the state treasury.
The current crime of fraudulent issuance of stocks was written into the Criminal Law in 1997. "There was a serious lack of understanding of this crime." Wang Jianjun said that the judicial protection of the registration system reform should be strengthened. The registration system reform is a bull nose project. It may be muddy. He suggested that the two highs jointly promote the revision of the law and substantially increase the illegal cost of fraudulent issuance of stocks. "This is a fraud to the public. It is currently a maximum of five years in prison, and serious punishment is not equal."
He suggested that the crime of fraudulent distribution should be dealt with in the light of financial fraud, and the maximum five-year sentence should be changed to no time. In addition, he suggested that the agencies involved in fraudulent issuance should be severely punished, and that the packaging should not be tolerated. Any fraud, "dare to take the jobs of these people."
At the same time, he also proposed to amend the penalty system. The current illegal proceeds from fraudulent issuance of stocks are turned over to the state treasury. Wang Jianjun believes that the illegal income comes from the losses that investors are deceived, and should be given priority to investors, so that illegal proceeds can be returned to the original owner.
Wang Jianjun said that the capital market is a highly transparent market and cannot be separated from the strong support of the judiciary. The low cost of capital market illegality has caused great concern to all parties.
Editor in charge: Li Limeng RF13188
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