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cailianshe news, september 15 (reporter yan jun)a large number of fines were issued to chunhou fund before the mid-autumn festival.

on september 14, the shanghai securities regulatory bureau announced eight fines, involving two management managers, as well as five other people including two chairmen, general managers and company shareholders.

the "disappearing board of directors" incident at chunhou fund caused by flaws in fund disclosure in 2023, which then involved the equity scandal of this individual-owned public fund, has been fermenting in the public opinion field for two or three months.

although the fines were disclosed in a concentrated manner, the issuance time of this batch of fines was not the same. as early as march 18, the shanghai securities regulatory bureau restricted the registration of new products of chunhou fund and punished six managers and shareholders, issuing a total of seven fines. on august 14, the shanghai securities regulatory bureau issued a decision to order chunhou fund to take corrective measures, requiring it to submit a written rectification report before august 30.

it is worth noting that chunhou fund disclosed two fines in its 2024 semi-annual report, ordering the company to rectify and suspend new product issuance for three months, and identifying the chairman jia hongbo as an inappropriate candidate. during the same period, the regulator did not disclose the five fines issued to the general manager and largest shareholder xing yuan, the second largest shareholder liu zhiwei, the third largest shareholder li xionghou, and the fourth largest shareholder dong weijun.

according to the regulatory penalty, chunhou fund needs to make rectifications within 60 days from the date of receipt of the penalty decision on march 18. the rectifications include returning the equity previously transferred privately between shareholders and transferring all the equity held by liu zhiwei to qualified transferees. however, cailianshe reporters learned that the rectifications were not completed within the regulatory time limit.

8 fines! the company, executives and shareholders received the fines in batches

according to incomplete statistics from cailianshe, at least 24 public funds were investigated or punished by regulators in the first half of this year for reasons such as imprudent investment decisions and imperfect internal control management. however, it is rare for a company, from the company to its executives and shareholders, to be fined collectively.

let’s look at the fines first.

first, the fund manager was fined.

the regulator believes that the company failed to fulfill its obligations to manage equity affairs in accordance with the law. after being aware of the company's relevant equity changes, it failed to accurately judge the impact of shareholders on the company's operations and management and report relevant information in a timely manner in accordance with the law. the regulator believes that chunhou fund's aforementioned violations reflect that the company's internal governance structure is not sound and its behavior seriously endangers the company's stable operation. in order to prevent and deal with related risks, the regulator urges the company to stop illegal and irregular activities.

on march 18, the shanghai securities regulatory bureau required chunhou fund to correct its illegal and irregular behaviors within three months, and to suspend accepting the company's public fund product registration applications and new private asset management plan filings during the rectification period.

the regulator said that chunhou fund's illegal and irregular behavior was related to the transfer of some of its shares by the company's second largest shareholder liu zhiwei, third largest shareholder li xionghou, fourth largest shareholder dong weijun, and largest shareholder xing yuan.

as well as

continuous reporting has been carried out.

on august 14, because chunhou fund’s fund products’ 2023 annual report, 2024 first quarter report and 2024 second quarter report were not disclosed in accordance with the relevant format and content, it violated the “information disclosure management measures for publicly offered securities investment funds” and was taken administrative supervision measures by the regulator to order rectification. it is required to submit a written report to the shanghai securities regulatory bureau before august 31.

according to the current fund product disclosure format and content standards, the authenticity of information disclosure is guaranteed by "the board of directors and directors of the fund manager". however, in chunhou fund's 2023 annual report, 2024 first quarter report, and second quarter report, the guarantee of the authenticity of information disclosure has changed from "guarantee by the board of directors and directors of the fund manager" to "guarantee by the fund manager". in addition, the 2023 annual report also does not contain the statement that "the annual report has been signed and agreed by more than two-thirds of the independent directors and issued by the chairman".

second, company executives and shareholders were punished.

in this punishment, the company's chairman jia hongbo, general manager xing yuan and other senior executives, as well as the first to fourth largest shareholders were all punished.

chairman jia hongbo was deemed an inappropriate candidate and general manager xing yuan was subject to a supervisory interview becauseit failed to perform its obligations in accordance with the law to manage equity affairs, and, even after being aware of relevant equity changes in the company, failed to accurately judge the impact of shareholders on the company's operations and management and to report relevant information in a timely manner in accordance with the law.

the major shareholder xing yuan, the second largest shareholder liu zhiwei, the third largest shareholder li xionghou and the fourth largest shareholder dong weijun were all ordered to make corrections and had their shareholder rights restricted becausewhen deciding to dispose of the shares held by chunhou fund, it failed to fulfill the obligation to report major events in a timely manner as required, violating the fund law. the regulator requires that the above-mentioned punished persons must correct the violations within 30 working days, and shall not exercise shareholder voting rights, dividend rights, priority subscription rights, inspection and copy rights, and other shareholder rights stipulated in the company's articles of association before correcting the illegal acts.

in addition, the core figure in the entire private equity transaction and the second largest shareholderliu zhiwei also needs to transfer all of his shares in chunhou fund to qualified transferees within 60 working days. before the transfer of all shares is completed, he shall not exercise the shareholder's voting rights, dividend rights, priority subscription rights, inspection and copy rights and other shareholder rights stipulated in the company's articles of association.

according to the regulatory penalty decision, it was issued on march 18, and both the 30-day and 60-day rectification deadlines had expired. until september, the above-mentioned rectifications had not been completed as required, and the shareholders were still in a contest of back and forth.

where is the problem?

let's briefly review this equity dispute. around march 2022, liu zhiwei privately signed equity purchase and sale agreements with li xionghou, the third shareholder of chunhou fund, and dong weijun, the fourth shareholder, to complete the acquisition of li xionghou and dong weijun's equity. during this period, he also transferred 10% of his equity to xing yuan. after the transfer, liu zhiwei actually owned the company's controlling rights and became the company's actual largest shareholder, holding 57% of the shares.

after the regulator discovered this, it stopped the equity transfer and demanded rectification.

in the subsequent confrontation between the parties, on september 1, liu zhiwei issued a statement saying that on april 14, 2022, xing yuan transferred her 10% equity in chunhou fund to liu zhiwei for 40 million yuan, and xing yuan actually received 26 million yuan in transfer funds. the rectification was blocked because xing yuan refused to return the 26 million yuan equity transfer down payment;

xing yuan believed that liu zhiwei held a mainland id card as a shareholder of chunhou fund, which has been cancelled, so she refused to return the funds to liu zhiwei's overseas account. in addition, xing yuan's request also included that the return of 26 million yuan must be carried out under the framework of liu zhiwei's transfer of all his 26% equity.

according to previous media reports and information verification from multiple parties, liu zhiwei is currently overseas and his communications with chunhou fund management are all online. however, xing yuan has not yet returned the 26 million yuan equity transfer payment on the grounds of liu zhiwei's "triple identity."

why are there only 2 out of 7 fines disclosed in the semi-annual report?

along with the concentrated disclosure of chunhou fund’s fines by regulators, chunhou fund’s “selective” disclosure in its semi-annual report has also caused controversy.

on august 31, chunhou fund disclosed in its semi-annual report that the manager and its senior executives had been subject to audits or penalties, including that chunhou fund, as a manager, failed to perform its obligations in accordance with the law in managing equity affairs and was ordered to rectify the situation within three months. the registration of new products was suspended during the rectification period, and chairman jia hongbo was identified as having taken inappropriate personnel actions.

however, according to the fines disclosed by the shanghai securities regulatory bureau this time, on march 18, the shanghai securities regulatory commission issued a total of 7 penalties to chunhou fund and its senior executives and shareholders, but chunhou fund only chose to disclose 2 of them. what is the hidden story behind this?

some industry insiders pointed out that chunhou fund is facing a new test as to whether the punishment for "omitted" senior executives and shareholders involves false disclosure of information.

a public fund compliance person told cailianshe reporters that there are no winners in equity infighting for public fund companies. the original intention of licensed financial institutions is to create returns for holders and then create value for shareholders. the protracted shareholder infighting surrounding chunhou fund has not yet seen signs of rectification and improvement, which has affected the trust of channel parties and fund investors.

in addition, according to the "institutional supervision situation bulletin" issued by the regulator recently, the revised public fund manager classification evaluation system has been implemented. in this revision, "compliance and risk control first" is the system's basis, and the bottom line ratio of compliance and risk control pre-evaluation is increased from 10% to 20%. in principle, class c managers are not allowed to participate in innovative product (business) pilot projects, and the inspection and monitoring of them will be strengthened accordingly, and their applications for establishing subsidiaries or adding new business qualifications will be treated with caution.

among the compliance risk control indicators, compliance indicators mainly include criminal penalties, administrative penalties, and regulatory measures taken by judicial and administrative agencies, and disciplinary sanctions and self-regulatory management measures taken by industry self-regulatory organizations. risk control indicators mainly evaluate corporate governance, comprehensive risk management, information system security, investor rights protection, etc.

compliance and risk control are the lifeline that financial institutions must uphold, and this is especially true for individual public offerings. for chunhou fund, the top priority is to put the interests of holders first, and for the executives and shareholders involved to put aside their own interests and complete rectification as soon as possible in accordance with regulatory requirements.