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the "board of directors farce" of chunhou fund has finally received a regulatory tone. recently, the shanghai securities regulatory bureau disclosed 8 regulatory letters, and the targets of punishment were all chunhou fund and related personnel. due to the illegal transfer of equity by the company's shareholders, the shanghai securities regulatory bureau ordered chunhou fund to make corrections within three months from the date of receipt of the decision letter, and stated that during the rectification period, it would suspend the acceptance of chunhou fund's public fund product registration applications and the filing of new private asset management plans. in addition, the chairman, general manager and several shareholders of chunhou fund were also punished by the regulator. on september 17, chunhou fund announced that it has been nearly 6 months since the above-mentioned administrative supervision measures were taken. during this period, the company has been actively and proactively reporting the relevant rectification work to the regulatory authorities in a timely manner. in the view of industry insiders, the regulatory punishment of chunhou fund will have many impacts on its subsequent development, such as restrictions on the issuance of new products, slowing growth in asset management scale, declining investor confidence, and possible pressure on fund redemption.

directly pointed out that the equity transfer was illegal

on september 17, chunhou fund announced that the shanghai securities regulatory bureau published on its website the relevant administrative supervision measures made on march 18, 2024 on the company and some of its shareholders and chairman. it has been nearly 6 months since the above administrative supervision measures were made. during this period, the company has been actively and proactively reporting the relevant rectification work to the regulatory authorities in a timely manner.

at the same time on september 17, xing yuan, the licensed sponsor of chunhou fund, also issued a statement on the company's equity transfer, the inability to effectively convene the board of directors, information disclosure, etc. (hereinafter referred to as the "statement"). the statement pointed out that around march 2022, the company's second largest shareholder liu zhiwei used "asymmetric" and "time difference" methods between shareholders to privately communicate with the third largest shareholder li xionghou and the fourth largest shareholder dong weijun about equity acquisition matters, and successively signed equity purchase and sale agreements to complete the acquisition of li xionghou and dong weijun's equity-related matters.

looking back on september 14, the shanghai securities regulatory bureau issued 8 regulatory letters, directly pointing out that chunhou fund failed to fulfill its obligations in equity affairs management in accordance with the law. although the 8 regulatory letters were disclosed on the same day, the signing time was different. among them, 7 regulatory letters were issued on march 18 this year.

specifically, the shanghai securities regulatory bureau pointed out that chunhou fund, after knowing about the relevant equity changes in the company, failed to accurately judge the impact of shareholders on the company's operation and management and report relevant information in a timely manner in accordance with the law, which reflects that the company's internal governance structure is not sound and the relevant behavior seriously endangers the company's stable operation. in order to prevent and deal with related risks, the shanghai securities regulatory bureau urged chunhou fund to stop related illegal and irregular behaviors. at the same time, the shanghai securities regulatory bureau ordered chunhou fund to make corrections within three months from the date of receipt of the decision letter, and suspend the acceptance of chunhou fund's public fund product registration applications and new private asset management plan filings during the rectification period.

while ordering the company to make corrections, the shanghai securities regulatory bureau also punished several responsible persons. according to the regulatory letter, since liu zhiwei, a shareholder of chunhou fund, signed equity transfer agreements with multiple people and paid equity transfer fees, the company's equity structure and corporate governance stability were seriously affected, which had a significant impact on the company's operations. dong weijun and li xionghou also failed to fulfill their obligations to report major events in a timely manner when deciding to dispose of their shares in chunhou fund.

in response to the above situation, the shanghai securities regulatory bureau decided to identify jia hongbo, chairman of chunhou fund, as an inappropriate candidate, and required him not to serve as a director, supervisor or senior manager of a public fund manager within three years; at the same time, it took regulatory talks with the company's general manager xing yuan.

at the same time, the shanghai securities regulatory bureau ordered liu zhiwei to make corrections within 60 working days from the date of receipt of the decision letter, and transfer all the shares held by him in chunhou fund to qualified transferees within the aforementioned period; and decided to order the four shareholders of chunhou fund, xing yuan, liu zhiwei, li xionghou and dong weijun, to make corrections and restrict the shareholder rights. before the completion of the transfer of all shares, the four persons shall not exercise the shareholder voting rights, dividend rights, priority subscription rights, right to review and copy and other shareholder rights stipulated in the company's articles of association.

in addition, there is another supervision letter dated august 14. the shanghai securities regulatory bureau pointed out that chunhou fund's publicly disclosed fund product 2023 annual report, 2024 first quarter report and 2024 second quarter report did not compile important parts in accordance with regulations, and decided to take administrative supervision measures to order it to correct the situation.

according to the fund product disclosure format and content standards, the authenticity of the disclosure information guaranteed by the fund manager's board of directors and directors must be disclosed in the quarterly, semi-annual and annual reports. however, in the above-mentioned annual and quarterly reports of chunhou fund, the guarantee of the authenticity of the disclosure information has changed from the previous "guarantee by the fund manager's board of directors and directors" to "guarantee by the fund manager". in addition, the 2023 annual report of chunhou fund's products also lacks the relevant statement that "the annual report has been signed and agreed by more than two-thirds of the independent directors and issued by the chairman."

regarding the relevant situation, xing yuan mentioned in the statement that the company's board of directors could not be effectively convened, resulting in the company's normal external information disclosure format temporarily unable to meet the regulatory format requirements. from march to august 2024, the company has continuously reported the above situation and reported the possible problems to the regulatory authorities in writing through various channels and in various ways, and proposed possible countermeasures and suggested solutions. in order to meet the time limit requirements for information disclosure, all information data are reviewed by the custodian bank and are guaranteed to be true and accurate. the information is disclosed based on facts and according to the timeline process. the company will also maintain communication and follow up with the regulator on subsequent relevant situations.

internal management and information disclosure compliance should be strengthened

according to the official website, chunhou fund was established on november 3, 2018 with a registered capital of rmb 100 million. as of now, xing yuan, liu zhiwei, li xionghou, li wenzhong, dong weijun and nie riming are still shareholders of chunhou fund, holding 31.2%, 26%, 21%, 10%, 10% and 1.8% of the company's equity respectively.

as early as august 2024, when the public offering semi-annual report was disclosed, relevant information about chunhou fund's illegal equity transfer was disclosed. among them, the two regulatory letters about chunhou fund being ordered to make corrections within three months and jia hongbo being identified as an inappropriate candidate were disclosed in the semi-annual report. the other regulatory letters mentioned above were not disclosed in the semi-annual report.

on august 31 this year, chunhou fund also issued an announcement stating that it had found effective evidence that the company's second largest shareholder liu zhiwei had triple identities. he not only held two sets of second-generation resident identity cards of the people's republic of china, but also was issued a hong kong resident identity card by the immigration department of the hong kong special administrative region government.

at the same time, the announcement also pointed out that in april 2024, chunhou fund sorted out the above evidence clues and related situations and formally submitted relevant reports to the regulatory authorities, waiting for further verification and verification by the regulatory authorities and issuing handling opinions. in order to effectively protect the interests of all shareholders of the company from being infringed by the above-mentioned issues, chunhou fund stated that since the discovery of the matter, it has immediately and comprehensively implemented risk isolation and cutting measures with liu zhiwei and his related personnel. based on the above situation and relevant legal reasons, the board of directors could not be effectively convened, and all relevant situations were also reported to the regulatory authorities.

subsequently, in early september, a letter signed by "liu zhiwei" to all shareholders, directors, supervisors and employees of chunhou fund circulated in the market. it is reported that the relevant letter stated that the "triple identity" mentioned in the previous announcement was pure rumor and suspected of slander, and also pointed the finger at xing yuan, general manager of chunhou fund, for the governance of the chaos. however, with the issuance of the above-mentioned regulatory letter, this "board of directors farce" finally ushered in the regulatory tone.

in her statement, xing yuan mentioned that the refund rectification logic may have undergone major changes due to liu zhiwei's identity issue, and whether liu zhiwei's holding of multiple domestic and foreign identities may involve a series of serious judicial and regulatory arbitrage activities. we are still waiting for a response from the china securities regulatory commission and the shanghai securities regulatory bureau.

regarding the rectification progress of the above situation and the impact of the relevant regulatory letters, the beijing business daily reporter called chunhou fund, but failed to make effective contact. the reporter noted that chunhou fund mentioned in its 2024 interim report that the company actively rectified the situation in which it failed to fulfill its obligations to manage equity affairs in accordance with the law. in addition, chunhou fund also mentioned in the announcement released on september 17 that the company's senior executives, investment research team and employees have been relatively stable and without any operating risks. the company will always adhere to the original intention of public offering, do a good job in the original work of public offering, and promote all business and management work as usual.

financial commentator guo shiliang believes that the suspension of registration applications and new filings may have a certain impact on the development of chunhou fund. overall, individual public funds may be weaker than other professional institutions in terms of compliance and professionalism, but individual public funds are relatively easy to create their own style and unique investment philosophy, so they need to pay more attention to compliance and professional management to enhance their competitiveness.

bai wenxi, chief economist of the china region of the china enterprise capital alliance, also said that the regulatory punishment of chunhou fund will have many impacts on its subsequent development, such as restrictions on the issuance of new products, slowing growth in asset management scale, declining investor confidence, and possible pressure on fund redemption. the company's internal governance structure problems also need to be rectified within the specified time, otherwise it may face more severe regulatory measures. during the rectification period, chunhou fund needs to strengthen internal management and ensure compliance with information disclosure. at the same time, it may need to adjust the company's strategy to cope with the challenges brought about by restrictions on product issuance.

beijing business daily reporter li haiyuan