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five months after shanghai pangzeng investment was fined for handing over the investment and management responsibilities of its private equity products to shanghai taihehui, the case in which shanghai taihehui used shanghai pangzeng investment's products to manipulate the "kuaijishan" stock has been investigated and handled.

the shanghai regulatory bureau has recently disclosed that the parties involved, jin moushun, shanghai taihehui, and liu mouyu, all requested that no administrative penalties be imposed at the hearing.

however, the bureau believed that jin moushun and shanghai taihehui, through collusion, concentrated their financial and shareholding advantages to continuously buy and sell, affecting the stock trading price and volume of "kuaijishan", constituted manipulation of the securities market, and finally decided: 1) to impose a fine of 2.4 million yuan on jin moushun and shanghai taihehui (renamed: shanghai dengcheng consulting in january this year), of which jin moushun was fined 1.2 million yuan and shanghai dengcheng consulting was fined 1.2 million yuan; 2) liu mouyu was given a warning and fined 500,000 yuan.

according to the penalty notice, in order to maintain the share price of "kuaijishan" and deal with the risk of stock pledge, jin moushun, the then legal representative and chairman of jinggong group, and liu mouyu, the then president of shanghai taihehui, discussed and met. in july 2017, the investment committee of shanghai taihehui approved the increase of holdings of "kuaijishan" and other stocks in the secondary market; and to ensure that taihehui increased its holdings of "kuaijishan" and other stocks, with the approval of jin moushun, from december 2017 to october 2018, jinggong group, zhejiang jinggong holdings and shaoxing zhongfu holdings successively provided funds to the company actually controlled by shanghai taihehui.

from december 19, 2017 to april 8, 2019 (hereinafter referred to as the "manipulation period"), shanghai taihehui controlled and used a total of five accounts, namely pang zengyi no. 5, pang zengyi no. 12, and pang zengyi no. 13 (hereinafter referred to as the "account group involved in the case"), to trade "kuaijishan" stocks. according to calculations, the account group involved in the case bought 43.2074 million shares of "kuaijishan" during the manipulation period and sold them all, with a total loss of approximately rmb 1.739 million.

according to the china securities investment fund association, the above three private equity fund products all come from the private equity firm shanghai pangzeng investment. the first two products have been liquidated, and the institutional information was last updated in september last year.

on april 20 this year, the shanghai regulatory bureau decided to order shanghai pangzeng investment to make corrections, and also gave a warning to the then executive partner li, and imposed a fine of 30,000 yuan. the bureau pointed out that from july 2017 to november 2019, shanghai pangzeng, as the manager of private equity funds such as pangzengyi no. 2, pangzengyi no. 3, pangzengyi no. 5, pangzengyi no. 8 structure, pangzengyi no. 9 private equity, pangzengyi no. 11 private equity, pangzengyi no. 12, and pangzengyi no. 13, did not actually perform the duties of a private equity fund manager, and handed over the investment and management responsibilities to shanghai taihehui.

how did you lose more than 1.7 million during the manipulation period?

according to the shanghai regulatory bureau, the manipulation period can be divided into four stages:

during the first phase (december 19, 2017 to july 10, 2018), the main activity was buying and building positions. the total number of shares held and the proportion of outstanding shares held by the account group involved in the case increased from 0 to 1.02% and 1.26% respectively.

the cumulative competitive bidding buying volume of the account group involved in the case was 7.5242 million shares, corresponding to a buying amount of 82.2784 million yuan; the cumulative competitive bidding selling volume was 2.4750 million shares, corresponding to a selling amount of 26.5137 million yuan. the buying and selling volumes accounted for 3.7% and 1.22% of the cumulative competitive bidding volume of the market during the period, respectively.

during the second phase (july 11, 2018 to october 17, 2018), the main focus was on pushing up stock prices. the total number of shares held and the proportion of outstanding shares held by the account group involved in the case increased to 4.05% and 5.03%, respectively.

the account group involved in the case had a cumulative competitive bidding buying volume of 17.8186 million shares, corresponding to a buying amount of 178 million yuan; the cumulative competitive bidding selling volume was 2.7298 million shares, corresponding to a selling amount of 26.9995 million yuan. the buying and selling volumes accounted for 33.80% and 5.18% of the cumulative competitive bidding volume of the market during the period, respectively.

the account group involved in the case submitted 3,520 purchase orders totaling 26,037,600 shares, of which 2,601 orders totaling 18,358,900 shares had a bid price not lower than the latest market transaction price before the bid, accounting for 70.51% of the same-direction bids submitted by the account group during that period; 2,034 orders totaling 16,126,600 shares had a bid price not lower than the market top selling price before the bid, accounting for 61.94% of the same-direction bids submitted by the account group during that period. in the 65 trading days, the account group involved in the case ranked first in the market in terms of bids submitted on 39 trading days, of which the bids submitted accounted for more than 10% of the total bids submitted on 41 trading days, more than 20% on 30 trading days, and more than 30% on 18 trading days.

during this period, the account group involved in the case ranked first in the market in terms of the number of competitive bidding purchase transactions for 43 consecutive trading days. the proportion of competitive bidding purchase transactions in the market exceeded 10% for 44 trading days, exceeded 20% for 36 trading days, exceeded 30% for 27 trading days, and exceeded 40% for 20 trading days.

at the same time, the share price of "huijishan" rose by 12.62%, deviating from the shanghai composite index by 22.03%.

the third stage (october 18, 2018 to february 19, 2019) was mainly focused on maintaining the stock price. the total number of shares held and the proportion of outstanding shares held by the account group involved in the case increased to 4.89% and 6.08% respectively.

the account group involved in the case had a cumulative competitive bidding buying volume of 8.3249 million shares, corresponding to a buying amount of 77.5361 million yuan, and a cumulative competitive bidding selling volume of 4.1579 million shares, corresponding to a selling amount of 39.7414 million yuan. the buying and selling volumes accounted for 11.17% and 5.58% of the total competitive bidding volume of the market during the period, respectively.

the fourth stage (february 20, 2019 to april 8, 2019) was mainly focused on selling out positions, and the total number of shares held and the proportion of outstanding shares held by the account group involved in the case gradually decreased to 0.

the account group involved in the case had a cumulative competitive bidding buying volume of 483,600 shares, corresponding to a buying amount of 4.7147 million yuan; the cumulative competitive bidding selling volume was 24.7886 million shares, corresponding to a selling amount of 248 million yuan. the buying and selling volumes accounted for 0.31% and 15.86% of the cumulative competitive bidding volume of the market during the period, respectively.

the shanghai regulatory bureau held a hearing on june 6 this year and listened to relevant statements and defense opinions. all three parties requested that no administrative penalties be imposed.

illegal market manipulation has been identified

after review, the shanghai regulatory bureau accepted the opinions of the parties regarding the nature of the above-mentioned 10 million yuan and made adjustments in the penalty decision. the bureau did not accept other statements and defenses raised by the parties.

the shanghai regulatory bureau believes that:

1) the evidence in the case is sufficient to prove that, in order to deal with the risk of stock pledge, jin moushun and shanghai taihehui conspired to concentrate their financial and shareholding advantages to continuously buy and sell, affecting the trading price and volume of "kuaijishan" stocks.

2) the party concerned has admitted to carrying out the illegal acts involved in the case during the investigation. although the party concerned raised different opinions from those stated during the investigation during the statement of defense and the hearing, considering that the evidence forms such as the interrogation records in the case meet the requirements, the content can directly point to the main facts of the case and corroborate each other, and the party concerned’s subsequent statements are contradictory and no reasonable explanation is provided, the bureau will not accept them.

iii) regarding the funds provided by jinggong group and others. 1) the transfer of the relevant funds involved in the case was close to the transaction time of the account group involved in the case, and it can be corroborated with the evidence in the case. 2) the parties' claims about the nature of the 67 million yuan funds lack factual basis, and the relevant claims are contradictory and difficult to reconcile. the supplementary evidence submitted by jin moushun and shanghai taihehui cannot achieve their purpose of proof. 3) whether the listed company has issued an announcement of major shareholders' shareholding increase does not affect the determination of market manipulation in this case, and the illegal behavior in this case is that the jinggong group and others provided funds and the accounts of relevant private equity fund products conducted transactions, which does not belong to shareholder shareholding increase.

iv) the claims made by the parties that there is no risk of liquidation, no shareholding advantage, and the stock price trend of "kuaijishan" is consistent with the stock price trend of listed companies in the rice wine industry lack factual basis. the claims made by the parties that shanghai taihehui did not require jinggong group to compensate or make up, was optimistic about "kuaijishan", bought at a price not lower than the "latest market transaction price" and "market bid price" and did not constitute market manipulation, were in line with macroeconomic policies, and did not receive abnormal trading warnings from securities companies, etc., do not affect the determination of illegal market manipulation in this case.

fifth, the clues of the illegal behavior have entered the field of vision of the state public power agency, which means that the illegal behavior has been discovered. the bureau discovered that the illegal behavior in question was no more than two years after it was terminated, so the administrative penalty did not exceed the statute of limitations.