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ge (female), who worked as the general manager of the investment banking business department of a securities company, had her monthly salary reduced from 100,000 yuan to 71,400 yuan. at the same time, because the project she was responsible for was fined by the regulator, the company withheld ge's bonuses for other projects. ge then filed a lawsuit, demanding that the company pay the salary difference and project bonuses totaling 704,500 yuan, but ultimately lost the case.

recently, the china judgment documents network disclosed a second-instance judgment on a labor contract dispute.according to the information in the verdict, the brokerage firm involved was huaying securities, and ge had worked for the company for 12 years.

the investment banking project involved in the litigation dispute between the two parties is longli bio. longli bio was previously named by the china securities regulatory commission for prominent systematic fraud and was delisted in july 2020. huaying securities, together with lixin accounting firm and other related parties, were sued by more than a thousand investors, demanding compensation for the losses caused by longli bio's false statements. the case is currently in the early stages of legal proceedings.

monthly salary dropped from 100,000 yuan to 70,000 yuan

female investment bank executive sues company for salary

according to the judgment documents network, ge joined a certain company on may 1, 2011, and the two parties signed an open-ended labor contract with a term starting from may 1, 2017. ge was originally the general manager of business department 1, and from february 2023, ge worked in the business development department of a certain company.

ge's salary standard has been 100,000 yuan/month since 2015, adjusted to 102,000 yuan/month in july 2022, and adjusted to 71,400 yuan/month in november 2022.。

on june 19, 2023, the labor contract between the two parties was terminated.on june 16, 2023, ge applied for arbitration to a certain committee.the company is required to pay the salary difference of 244,800 yuan from november 2022 to june 2023 and the project bonus of 459,700 yuanthe arbitration committee then decided to terminate the trial. ge was dissatisfied with the decision and filed a lawsuit in court.

according to the information disclosed in the judgment, the company involved is huaying securities.during ge's tenure at the company, two important projects he was responsible for, namely the major asset restructuring of longli bio and the ipo of andeli, received regulatory fines.。

on june 2, 2021, huaying securities issued a "decision on punishing personnel related to the longli bio-major asset restructuring project", notifying that due to the illegal misappropriation of raised funds in the project,decided to withhold ge's bonus of 127,300 yuanon the same day, huaying securities issued a "decision on the company's warning letter and the punishment of relevant departments and personnel", notifying that the andeli project had not strictly followed the project establishment procedures, etc.it was decided to conduct a compliance talk with ge and deduct his performance bonus of 20,000 yuan.。

in summary,because the project received a fine, huaying securities decided to deduct ge's bonus totaling 147,300 yuanthe dispute between the two parties also arose from this.that is, if the project is punished by the regulator, can the company pursue ge's bonus? and if the bonus has already been paid, does it have the right to deduct it from the bonus of other projects?in addition, huaying securities also reduced ge's salary due to failure to meet the performance assessment targets agreed in the performance responsibility statement. the two sides also disputed whether the salary reduction was reasonable.

according to the verdict, in january 2022, ge signed a performance responsibility letter, which stipulated the performance requirements during the assessment period, including achieving departmental profitability and a certain income. if the assessment targets are not met during the assessment period, the company will take assessment measures depending on the circumstances, including but not limited to disbanding the department, demotion and salary reduction, job adjustment, resignation of party b, termination of the labor contract, etc. in addition, the company's "regulations on reporting, handling and accountability of compliance risks and illegal matters" states that economic penalties include withholding bonuses, ordering the return of bonuses, salary cuts, and suspension of salary.

after huaying securities reduced his salary, ge believed that huaying securities' decision to reduce his salary was not in compliance with the labor contract and the company's legal regulations. at the same time, as of november 2022, the projects managed by ge had a cumulative income of 240 million yuan, and the balance of payments account was a positive 184.6 million yuan. huaying securities' decision to notify ge of a 30% salary reduction in october 2022 on the grounds of two years of losses (a total of 2.9 million yuan) was illegal and unreasonable.

regarding the economic penalty for the project, ge believed that huaying securities did not provide evidence that the economic penalty decision was in accordance with the labor contract law and the company system formulated in accordance with the law, so the bonus should be paid. at the same time, the business activities of the andeli project team and the inspection and warning letter issued by the csrc were two parallel and unconnected events. there was no evidence to prove that ge, as the contractor and person in charge of the project, was responsible for the warning of huaying securities due to imperfect internal control.

however, the court held that, first,in 2022, the business department where ge worked did not make a profit, nor did it meet the assessment targets stated in the performance responsibility statement. therefore, huaying securities did not do anything wrong by reducing ge's salary within a reasonable range in accordance with the agreement in the responsibility statement.。

secondly, longli bio's major asset restructuring project involved misappropriation of raised funds in violation of regulations, and therefore huaying securities was issued a warning letter by the regulator. as the contractor and person in charge of the project, ge had the responsibility to review and approve the project process and documents. therefore, huaying securities decided to withhold part of ge's bonus for the project, which was based on facts and regulations.。since ge had already received a bonus of more than 2.6 million yuan for the longli biotech project, huaying decided to withhold 127,300 yuan from ge for the project., which is also reasonable.

ultimately, the court ruled that ge's request to change the judgment and require huaying securities to pay ge the salary difference was not supported, and supported huaying securities' decision not to pay ge the withheld bonus.

major projects in charge were punished by regulators

company: after salary increasesalarystill above the market average

public information shows that huaying securities is a sino-british joint venture securities investment company jointly founded by the royal bank of scotland (hereinafter referred to as rbs) and guolian securities (601456.sh/01456.hk). it was established in april 2011. rbs holds 33.3% of huaying securities' shares, and the remaining 67.7% is held by guolian securities. the cooperation between the two parties only involves investment banking business.rbs transferred all of its shares to guolian securities, and huaying securities became a wholly-owned subsidiary of guolian securities.

in july 2011, huaying securities completed its first ipo project since its establishment.considered the “first biofuel stock”longli biotech was successfully listed. less than 9 years later,on may 22, 2020, the shenzhen stock exchange announced that longli biotech's shares would be delisted.longli biotechnology's mandatory delisting condition is three consecutive years of losses.。

also,due to its prominent systematic fraud, longli bio was also named by the china securities regulatory commission as a typical caseaccording to the investigation by the china securities regulatory commission, from 2015 to 2017, longli biotechnology deleted and altered financial data and forged accounting vouchers, resulting in an inflated asset of nearly 500 million yuan, a false reduction of liabilities by more than 1.7 billion yuan, and an inflated profit of nearly 140 million yuan in 2015; in 2016, it inflated assets by nearly 130 million yuan, reduced liabilities by more than 2.8 billion yuan, and inflated profits by nearly 250 million yuan; in the first half of 2017, it reduced liabilities by more than 2.9 billion yuan and inflated profits by nearly 200 million yuan.

in january 2021, the csrc issued an "administrative penalty decision" to longli bio and 18 other responsible parties including cheng shaobo. the csrc ordered longli bio to correct its mistakes, gave it a warning and imposed a fine of 600,000 yuan; and imposed a total fine of 1.5 million yuan on cheng shaobo, the then legal representative and chairman of longli bio.

it is worth noting that in january 2020,the shandong securities regulatory bureau issued a warning letter to huaying securities and two responsible persons. huaying securities, as the independent financial advisor for longli bio's major asset restructuring, and zhang guoyong and fan guangzheng, as the (then) financial advisor sponsors of the project, issued a continuous supervision report that was inconsistent with the actual situation, and some due diligence work was not standardized and some working papers were not kept complete.。

in november 2021, huaying securities was fined again for longli bio. the shandong securities regulatory bureau issued a warning letter to huaying securities and the two insurance agencies.huaying securities, as the sponsor of longli bio's initial public offering and listing,yue yuanbin andas a sponsor representative, ge juanjuan failed to perform due diligence and fulfilled the full verification procedures, and the opinions issued contained false records and other violations.。

also,longli bio,huaying securities and other related parties were also sued by more than 1,600 investors, demanding compensation for the losses caused by longli bio's false statements.a total of approximately 916 million yuan。

as for the andeli ipo project, in october 2020, huaying securities received a warning letter from the china securities regulatory commission, which mentioned that after investigation,huaying securities failed to strictly follow the project approval procedures in the initial public offering and listing (ipo) of yantai north andeli juice co., ltd.。

andeli announced on june 21, 2023 that huaying securities, as the sponsor of the company's initial public offering of a-shares and listing, originally designated ms. ge juanjuan and ms. yang huiquan as the company's continuous supervision sponsor representatives.the original sponsor representative, ms. ge juanjuan, will no longer serve as the company's continuous supervision sponsor representative due to work adjustments.in order to ensure the smooth progress of the company's continuous supervision work, huaying securities decided to authorize mr. li jixiu to replace ms. ge juanjuan as the company's continuous supervision sponsor representative and continue to perform continuous supervision obligations.

but,despite being punished by regulators and facing lawsuits, ge still received a bonus of more than 2 million yuan for the longli biopharma restructuring project.the only bonus for the andeli ipo project that has not been paid is the remaining deferred portion of 13,300 yuan and a continuing supervision allowance of 50,000 yuan.

in addition, huaying securities also stated thatge's salary after the salary adjustment is still higher than the industry market average。

as for the performance pay recovery and rebate system, as early as may 2022, the "guidelines for securities companies to establish a sound remuneration system" issued by the china securities association clearly stated that when formulating a remuneration system, securities companies should establish a strict accountability mechanism to enhance the binding force of remuneration management, including but not limited to the suspension, recovery and rebate of bonuses, allowances and other remuneration, and investigate the internal economic responsibilities of executives and key positions who violate laws and regulations or cause the company to have excessive risk exposure. the "notice of the ministry of finance on further strengthening the financial management of state-owned financial enterprises" issued in august 2022 also has relevant requirements.

since the beginning of this year, more and more securities firms have proposed to clarify the salary recovery mechanism and strictly implement it. among the listed securities firms, china merchants securities, dongxing securities, hongta securities, boc securities, citic securities, industrial securities, everbright securities, etc. have all mentioned this regulation in their financial reports.

edit|duan lian du bo du heng feng

proofreading|wang yuelong

cover image: visual china (image and text are unrelated)

daily economic news is compiled from china judgment documents network, china securities journal, china economic network, china business network, china securities regulatory commission website, public information, etc.

daily economic news