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(Original title: How can we establish a "world" without abiding by the law: How can listed companies "just apologize" for frequent short-term trading violations? | Telecom Review)

Source: Xinhua Daily Telegraph, July 24

Author: Sun Fei, Xinhua Daily Telegraph commentator

Recently, Tiandi No. 1, an apple cider vinegar manufacturer, was involved in multiple illegal short-termtrade, the company's actual controller and chairman Chen Sheng received a warning letter from the National Equities Exchange and Quotation Company.Public CompanyMany investors have questioned the company's response and explanations after repeatedly violating regulations due to "operational errors" and issuing "apology statements". In fact, such phenomena are not isolated cases. Since the beginning of this year, many company executives have engaged in illegal short-term trading, reflecting the problems of some corporate leaders' weak legal awareness and low cost of breaking the law. It is necessary to keep vigilant to curb the chaos.

According to the relevant announcement released by Tiandi No. 1 in early July, Chen bought Tiandi No. 1 in March this year.stock128,900 shares, which occurred within six months of the date of his last sale of Tiandi No. 1 shares; Chen also engaged in multiple short-term transactions within twelve months. Tiandi No. 1 stated that Chen's short-term transactions were due to his "operational error" in selling the company's shares when he was carrying out his plan to increase his shareholdings. The company's board of directors stated that it would urge relevant personnel to strictly regulate the behavior of buying and selling the company's shares, strengthen the management and training of shareholders, directors, supervisors, senior management and close associates, and strengthen relevant business learning to prevent similar incidents from happening again.

The director's father has been engaged in illegal short-term trading for nearly a year and a half, the chairman's wife has been involved in illegal stock speculation involving more than 150 million yuan, and the director's mother has bought stocks to make profits... Since the beginning of this year, listed companies have seen a number of illegal short-term trading by directors, supervisors, and their relatives. In mid-July alone, many listed companies such as Quartz and Asia Sheng Group were warned by the exchange. Some companies attributed the reasons to "operational errors," "no subjective intent," and "ignorance of rules," but such statements are often difficult to convince investors, and doubts such as "insider trading" and "deliberate" appear from time to time.

In fact, Article 44 of the Securities Law has always clearly stipulated the constraints on related behaviors. Shareholders, directors, supervisors, and senior managers of listed companies who hold more than 5% of the shares, including those held by their spouses and immediate family members, and those who use other people's accounts to buy and sell company stocks within six months constitute illegal short-term trading. During the coaching stage before listing, the company's directors, supervisors, and senior managers received systematic training on laws and regulations and securities knowledge, and fulfilled their supervision and education obligations for their family members. However, some illegal short-term trading still occurs repeatedly, reflecting that some directors, supervisors, and senior managers lack awe for the market and the rule of law, and have a weak awareness of the red lines of rules, which may damage the company's reputation and the interests of investors.

It is urgent to make the so-called "operational errors" pay the price, and to increase the cost of violations. From the public information, some directors, supervisors, and their relatives "misoperated" in the window period before the company's important information disclosure. The short-term transactions of "misoperation" may be suspected of insider trading. To curb the frequent occurrence of such violations, the relevant departments need to strengthen supervision, use big data technology, and conduct multi-dimensional monitoring and analysis to make it impossible for violators to hide. At the same time, for illegal short-term transactions, the current penalties are often limited to handing over illegal gains, which does not have a sufficient deterrent effect on illegal acts. It is advisable to further refine the responsibility standards and increase the penalties, and not just "apologize and let it go."

As the "key minority", directors, supervisors and senior managers of listed companies are responsible for improving the quality of the company and protecting the legitimate rights and interests of small and medium-sized shareholders. Directors, supervisors and senior managers of listed companies should be loyal and diligent to the company and shareholders, constantly improve their legal awareness, manage themselves and the people around them.Nine Articles"With the introduction of the "Notice on the Administration of Listed Companies in the Capital Market", the capital market has put forward higher requirements for the high-quality development of listed companies. Only by abiding by laws and regulations and keeping promises can listed companies truly "stand firm in the world".