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[Introduction] Administrative supervision measures have been taken against several senior executives and business managers of Hualin Securities.

China Fund News reporter Chen Xi

Another senior executive of a listed securities firm received a regulatory fine!

On August 8, the Tibet Securities Regulatory Bureau announced three administrative supervision measures. Due to the problems of inaccurate business data reporting, inaccurate filling of monthly risk control index supervision reports, and excessive risk control indicators at Hualin Securities, a total of eight senior executives and business managers, including the then general manager Zhao Weixing, were issued warning letters and had supervisory talks.

On the evening of August 7, Hualin Securities announced that it had received a prior notice of administrative supervision measures from the Tibet Securities Regulatory Bureau. Due to four violations, the Tibet Securities Regulatory Bureau decided to take supervisory and management measures against Hualin Securities, including ordering it to make corrections within a time limit, increase the number of internal compliance inspections, and submit compliance inspection reports. Hualin Securities' legal representative and chairman Lin Li was publicly condemned and recorded in the securities and futures market integrity file.

Inaccurate reporting of business data and excessive risk control indicators

8 persons responsible were named

The Tibet Securities Regulatory Bureau has taken administrative supervision measures against eight responsible persons of Hualin Securities, mainly involving the following issues:

First, Hualin Securities had problems with inaccurate reporting of monthly risk control indicator supervision reports and exceeding risk control indicators. The Tibet Securities Regulatory Bureau pointed out that Wen Xuebin was the then Chief Risk Officer and Compliance Director of Hualin Securities, and Guan Xiaobin was the then Financial Director of Hualin Securities. They failed to fully perform their supervisory and reporting duties and were responsible for the violation. The Tibet Securities Regulatory Bureau decided to take supervisory and management measures against the two by issuing warning letters and recording them in the integrity files of the securities and futures markets.

The Tibet Securities Regulatory Bureau pointed out that the inaccurate reporting of Hualin Securities' statements and the excessive risk control indicators were mainly affected by the bill business data. Zhu Wenjin was the then general manager of Hualin Securities and the senior executive in charge of the bill business, and Feng Zisen was the then head of the bill business department of Hualin Securities. They failed to fully perform their management duties and were responsible for the violations. The Tibet Securities Regulatory Bureau decided to take supervisory and management measures of regulatory talks against the two and record them in the integrity files of the securities and futures market.

At the same time, Hualin Securities had problems with inaccurate business data reporting. Zhao Weixing was the then general manager of Hualin Securities and a senior executive in charge of bill business, Zhang Dawei was the then compliance director of Hualin Securities, Li Pengxiang was the then head of the bill business department of Hualin Securities, and Gao Yanming was the relevant data capture personnel, and they were responsible for the above-mentioned violations. The Tibet Securities Regulatory Bureau decided to take supervisory and management measures against the four people by issuing warning letters and recording them in the integrity files of the securities and futures market.

Judging from the eight senior executives and business managers named by the Tibet Securities Regulatory Bureau this time, the violations involving Hualin Securities spanned a long period of time, with its two general managers and two compliance directors being named.

Public data shows that Zhu Wenjin served as president of Hualin Securities from December 2019 to June 2021, and later became vice chairman and member of the executive committee. Zhu Wenjin resigned in April this year for personal reasons and no longer holds any position in Hualin Securities and its holding subsidiaries.

Zhao Weixing served as CEO of Hualin Securities from November 2021 to October 2023, for about two years. In October 2023, Hualin Securities simultaneously announced the resignation of Zhao Weixing and Guan Xiaobin, both of whom resigned for personal reasons.

It is reported that Zhao Weixing has worked in the banking industry for many years and has also worked in many Internet financial institutions. He is known as a cross-border executive of "finance + technology". Previously, Zhao Weixing joined Hualin Securities, which was interpreted by the market as Hualin Securities' focus in the field of financial technology. After leaving Hualin Securities, Zhao Weixing returned to the banking industry. Last month, the Chongqing Regulatory Bureau of the State Financial Regulatory Administration approved Zhao Weixing's qualifications to serve as a director and president of Chongqing Fumin Bank Co., Ltd.

In addition, the two compliance directors of Hualin Securities named by the Tibet Securities Regulatory Bureau have also resigned one after another. Among them, Wen Xuebin served as compliance director of Hualin Securities from October 2019 to June 2021, and Zhang Dawei served as compliance director from October 2022 to February 2024.

Hualin Securities was ordered to make corrections within a time limit

Order to increase the number of internal compliance inspections

Before the Tibet Securities Regulatory Bureau announced the results of its handling of senior executives and business managers, Hualin Securities had already announced the situation at the company level.

On the evening of August 7, Hualin Securities issued an announcement regarding receipt of the advance notice of administrative supervision measures from the Tibet Securities Regulatory Bureau.

The Tibet Securities Regulatory Bureau pointed out that Hualin Securities had four problems: first, the monthly risk control indicator supervision report was inaccurate and the risk control indicators exceeded the standard; second, the business data reporting was inaccurate; third, multiple situation statements were inconsistent; and fourth, there were obvious loopholes in personnel appointment and removal and professional qualification management.

Based on this, the Tibet Securities Regulatory Bureau decided to take supervisory and management measures against Hualin Securities, ordering it to make corrections within a time limit, increase the number of internal compliance inspections, and submit compliance inspection reports, which will be recorded in the securities and futures market integrity file. Hualin Securities should conduct internal compliance inspections every three months within six months from the date of issuance of the supervisory and management measures, and submit compliance inspection reports to the Tibet Securities Regulatory Bureau within 10 working days after each inspection.

In addition, regarding the inaccurate filling of the monthly risk control indicator supervision report and the exceeding of risk control indicators, Lin Li, as the legal representative and chairman of Hualin Securities, was responsible for the violations. The Tibet Securities Regulatory Bureau decided to publicly condemn it through its official website and record it in the securities and futures market integrity file.

In this regard, Hualin Securities stated that the company attaches great importance to the above matters and is actively making rectifications. In the future, the company will continue to improve its compliance management and internal control level to prevent similar problems from happening again. Hualin Securities also stated that the advance notice of administrative supervision measures will not affect the company's normal business activities.

Since the beginning of this year, Hualin Securities and its branches have been named by regulatory authorities many times. In May this year, Hualin Securities Shanghai Branch was issued a warning letter by the Shanghai Securities Regulatory Bureau. During the same period, Hualin Securities and its chairman Lin Li, general manager Zhu Song, and board secretary Xie Yingming were issued a warning letter by the Tibet Regulatory Bureau.

In June this year, Hualin Securities and its chairman Lin Li, general manager Zhu Song, and board secretary Xie Yingming were issued a regulatory letter by the Shenzhen Stock Exchange due to inaccurate performance forecast disclosure and failure to disclose arbitration matters in a timely manner. The Shenzhen Stock Exchange requires Hualin Securities and all directors, supervisors and senior managers to seriously learn lessons and prevent such incidents from happening again.

As of the close of August 8, Hualin Securities' share price was 10.16 yuan per share, with a total market value of 27.4 billion yuan.

Editor: Xiaomo

Reviewer: Chen Siyang

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