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on the evening of september 13, a-share listed company hailian jinhui (sz002537, share price 4.95 yuan, market value 5.811 billion yuan) issued an announcement stating that the company's third-level subsidiary liandong advantage e-commerce co., ltd. (hereinafter referred to as "liandong business") received the "administrative penalty decision" issued by the beijing branch of the state administration of foreign exchange (jinghui fa [2024] no. 60).

the announcement shows thatbecause liandong commerce handled foreign exchange purchase and cross-border payment business for three cross-border merchants from july 2020 to august 2023, the review of transaction information did not meet the relevant management requirements,the beijing branch of the state administration of foreign exchange, in accordance with the foreign exchange administration regulations of the people’s republic of china and other relevant regulations,the illegal gains of rmb 387,300 from liandong business were confiscated and a fine of rmb 84.3211 million was imposed, with the total amount of fines and confiscations being rmb 84.7084 million.

image source: hailian jinhui announcement

involving cross-border foreign exchange business, the fine amount exceeded 80 million yuan,such super tickets are not common in the payment industry.it is reported that,in this ticket, the fine amount is approximately 217.72 times the illegal income.

wang pengbo, a financial industry analyst at broadcom analytics, told reporters that the huge fine imposed on liandong commerce reflects the severity of the relevant illegal facts; it is not ruled out that the company has been fined repeatedly, which led to such a huge fine. he said, "the intensity of the punishment is quite tough, reflecting the safe's regulatory determination of 'long teeth and thorns'. such a heavy fine also warns all cross-border payment institutions to adhere to the bottom line of compliance."

it is worth noting that this "fine" with a fine far exceeding the illegal income is not an "isolated case". on june 25 this year, the foreign exchange administrative penalty information released by the qingdao branch of the state administration of foreign exchange showed that qingdao xingxinchang new materials technology co., ltd. was confiscated of illegal income of 591.63 yuan and fined 18.639 million yuan for remittance of foreign exchange into the country in violation of regulations. at that time, the qingdao branch of the state administration of foreign exchange explained that since the company violated the relevant provisions of the document no. 37 of huifa [2014], there was illegal remittance, and the illegal amount totaled 28.83 million us dollars. in this regard, according to article 41 of the "foreign exchange administration regulations", it was punished at a rate of 10% of its illegal remittance amount, with a total fine of 18.639 million yuan.

the reporter of daily economic news noticed that on september 10, the beijing branch of the people's bank of china announced an administrative penalty information. liandong advantage was warned and fined 2.9 million yuan for four violations. the company's then deputy general manager xu moudong was also warned and fined 150,000 yuan for being directly responsible. the above four violations are: failure to implement the requirements of authenticity, completeness and traceability of transaction information; failure to strictly implement the merchant real-name system requirements; failure to preserve the application materials, qualification review materials and other archival materials of the contracted merchants in accordance with regulations; and failure to set up the acquiring accounts of the contracted merchants in accordance with regulations.

image source: beijing branch of the people's bank of china

the central bank's official website shows that liandong business first obtained a payment business license on august 29, 2011. the licensed business types are nationwide internet payment, mobile phone payment, and bank card acquiring. later, in accordance with the "regulations on the supervision and administration of non-bank payment institutions" and the corresponding implementation rules and other requirements, the business type was changed to the corresponding stored value account operation class i and payment transaction processing class i.

it is worth mentioning that liandong advantage is planning to change its owner recently, and the intended takeover party is an affiliated company of douyin group. hailian jinhui once issued an announcement stating that the company signed the "equity transfer agreement" with tianjin tongrong e-commerce co., ltd. (hereinafter referred to as "tianjin tongrong") on april 3, 2024. the company intends to transfer 100% of the equity of liandong business held by its wholly-owned subsidiary liandong advantage technology co., ltd. (hereinafter referred to as "liandong advantage") to tianjin tongrong. the transaction price is the benchmark transfer price of 750 million yuan + the net asset consideration on the delivery date.

after completing the equity transfer of liandong commerce, tianjin tongrong plans to merge liandong commerce through its wholly-owned subsidiary wuhan hezhong yibao technology co., ltd. wuhan hezhong yibao technology co., ltd. is the license holder of "douyin payment". after the completion of this transaction, it will provide support for offline transaction business scenarios such as douyin group's life services.

according to the company's official website, hailian jinhui was established in jimo district, qingdao in 2004 with a registered capital of 1.17 billion yuan. in january 2011, the company was listed on the shenzhen stock exchange. the company's main business involves intelligent manufacturing and information technology.

public information shows that liandong business obtained the "payment business license" in 2011. its business types cover class i stored value account operation and class i payment transaction processing, which means that it can engage in bank card acquiring, internet payment, and mobile phone payment business nationwide. the license is valid until august 28, 2026.

in terms of performance, in 2023,liandong business achieved revenue of 1.89 billion yuan and net profit of 81.2816 million yuan.

image source: hailian jinhui's announcement on the transfer of equity of a third-level wholly-owned subsidiary

at the same time, according to the disclosure of hailian jinhui, hailian jinhui achieved revenue of 4.093 billion yuan in the first half of 2024, a year-on-year decrease of 3.51%; net profit attributable to shareholders of listed companies was 53.615 million yuan, a year-on-year increase of 31.17%. among them, hailian jinhui's third-party payment service business revenue in the first half of 2024 was 925 million yuan, a year-on-year decrease of 9.08%.