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[Introduction] The China Securities Regulatory Commission intends to impose the maximum penalty on Xunxing Shares' controlling shareholder and other related parties

China Fund News reporter heard

On the evening of August 16, Xunxing Co., Ltd., the "No. 1 Zipper Stock", announced that the China Securities Regulatory Commission issued two "Administrative Penalty Advance Notices".It is proposed to impose the maximum penalty on the company's controlling shareholder, actual controller Huang Ningjie and the directly responsible supervisor。

Two "Preliminary Notices of Administrative Penalties" show that Xunxing Co., Ltd. and related parties are suspected of violating laws and regulations on information disclosure, and Huang Ningjie and others are suspected of manipulating the stock price of Xunxing Co., Ltd.

It is reported that the case of Xunxing Co., Ltd. lasted for 6 years and was a criminal case. Industry insiders believe that this shows that the regulatory authorities are keeping a close eye on illegal activities in the capital market and are resolute in their attitude, even if they are criminal cases that have gone through a long case handling cycle.

The regulator found two suspected problems

In terms of suspected illegal and irregular information disclosure, Xunxing Co., Ltd. failed to disclose the actual controller's situation and relevant contents of the "Equity Transfer Supplementary Agreement" in accordance with regulations in the "Reminder Announcement on the Company's Controlling Shareholder's Agreement to Transfer the Company's Shares and the Proposed Change of Actual Controller"; and in the 2016 and 2017 annual reports, it failed to disclose the actual controller's situation in accordance with regulations.

In December 2016, the "Detailed Report on Changes in Equity" disclosed by Tianjin Huizefeng Enterprise Management Co., Ltd. (hereinafter referred to as Huizefeng) failed to truthfully disclose the actual controller and relevant contents of the "Supplementary Agreement on Equity Transfer" as required.

In November 2016, Huizefeng signed the Equity Transfer Agreement and the Equity Transfer Supplementary Agreement with Fujian Xunxing Group Co., Ltd. (hereinafter referred to as Xunxing Group), the controlling shareholder of Xunxing Shares, which stipulated that Huizefeng would inject assets into Xunxing Shares after completing the share transfer.

After investigation, Huang Ningjie is the actual controller of Huizefeng. After the above-mentioned share transfer is completed, Huang Ningjie will become the actual controller of Xunxing Shares.

In terms of suspected manipulation of the share price of Xunxing Shares, from September 14 to November 10, 2017, Huang Ningjie, Wang Bo, Wang Lijun, and Yan Jie manipulated the share price of Xunxing Shares by means of continuous buying and selling through concentrated financial advantages and shareholding advantages in order to avoid the liquidation of Xunxing Shares pledged by Huizefeng.

From November 11, 2017 to September 9, 2018, Huang Ningjie and Wang Lijun used their advantageous positions as the actual controller and chairman of Xunxing Shares respectively to plan major asset restructuring information, which led to the suspension of Xunxing Shares in order to lock in its price.

Proposed maximum penalty

According to industry insiders, the illegal acts in the above two cases occurred before the new Securities Law came into effect and are subject to punishment under the 2005 Securities Law.

The China Securities Regulatory Commission intends to decide to impose the maximum penalty on Xunxing Co., Ltd.'s controlling shareholder, actual controller and directly responsible supervisors.

Specifically, in response to the suspected violations of information disclosure laws and regulations by Xunxing Co., Ltd. and relevant responsible persons, the China Securities Regulatory Commission intends to order Xunxing Co., Ltd., Huizefeng, Xunxing Group, and Huang Ningjie to correct their violations, give them warnings, and impose fines of 300,000 yuan, 600,000 yuan, 600,000 yuan, and 900,000 yuan, respectively.

At the same time, the China Securities Regulatory Commission plans to give warnings to Wang Lijun, Shi Mingqu and Shi Nengjian, and impose fines of 300,000 yuan, 300,000 yuan and 100,000 yuan respectively.

The China Securities Regulatory Commission pointed out that Huang Ningjie instructed Xunxing Co., Ltd. and Huizefeng to carry out the illegal acts involved in the case. Wang Lijun, as the chairman of Xunxing Co., Ltd. and executive director of Huizefeng, and Shi Mingqu, as the president and director of Xunxing Co., Ltd. and director of Xunxing Group, participated in and were aware of the illegal acts involved in the case, and the circumstances of the violations were serious.

In response to Huang Ningjie and others suspected of manipulating the share price of Xunxing Shares, the China Securities Regulatory Commission intends to decide to impose market bans on Huang Ningjie, Wang Lijun and Shi Mingqu for 10 years, 6 years and 4 years respectively; and impose a total fine of 3 million yuan on Huang Ningjie, Wang Bo, Wang Lijun and Yan Jie.

Supervision keeps close watch on criminal reversal cases

It is understood that the case involving Xunxing Co., Ltd. and related parties lasted for 6 years and was a criminal reversal case.

In 2018, the China Securities Regulatory Commission initiated an investigation into Xunxing Co., Ltd.'s suspected illegal and irregular information disclosure and transferred the case to judicial authorities for handling in accordance with the law.

After that, the China Securities Regulatory Commission launched an investigation again after receiving the case and related clues transferred back by the judicial authorities, and based on the investigation results, filed a case against Xunxing Co., Ltd.'s controlling shareholder for suspected illegal and irregular information disclosure and its actual controller for suspected market manipulation.

Industry insiders said that regulatory authorities will keep a close eye on illegal activities in the capital market and take a firm attitude even in criminal cases that take a long time to handle.

Specifically, regulatory agencies insist on "transferring all cases that should be transferred" for suspected crimes to avoid "replacing criminal punishment with fines"; for cases that do not require criminal liability or are exempted from criminal punishment according to law, but should be subject to administrative penalties, the regulatory agencies will resolutely pursue administrative illegal liability in accordance with the law.

Editor: Captain

Review: Xu Wen

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