China News Service, March 29 (China News reporter Xie Yiguan) In the past few days, the Shenzhen Stock Exchange announced the launch of on-site supervision of CITIC Securities, which aroused market concern, and CITIC Securities' stock price fell sharply. There are even rumors that CITIC Securities "hardened" the Shenzhen Stock Exchange and "operated behind closed doors" when sponsoring.

　　On March 28, CITIC Securities issued a statement saying: “Recently, CITIC Securities has noticed that some self-media, personal accounts, etc. have published and spread false and untrue information about CITIC Securities. The relevant remarks are contrary to the facts and have seriously damaged the company’s reputation. It is not conducive to the orderly and healthy development of the capital market."

  Screenshot from the "CITIC Securities Release" public account.

"Reply with one piece of paper"

　　As a securities firm with more than 20 years of experience in sponsoring, why was CITIC Securities subject to on-site supervision?

　　The incident originated from Lianggang Optoelectronics and the sponsor CITIC Securities’ responses to inquiries from the Shenzhen Stock Exchange.

　　After the initial listing application of Liangang Optoelectronics was accepted, the Shenzhen Stock Exchange has issued three rounds of review inquiries and regulatory letters, requiring Liangang Optoelectronics and intermediaries to verify the effectiveness of corporate governance, the standardization of financial internal controls, and the authenticity, accuracy and completeness of information disclosure, etc. illustrate.

　　Judging from the content of the first two inquiries from the Shenzhen Stock Exchange, the first round involved the industry competition pattern and GEM positioning, revenue and customers, specific operating data, fundraising projects, etc., while the second round focused more on the risk of performance decline, the holdings of actual controllers, etc. Issues such as higher share ratio.

　　Specifically, since the actual controller family controls a total of 98% of the shares, based on past experience, the company's equity is highly concentrated and internal controls are insufficient, making it easy to form a "one-man shop" phenomenon, and it is also easier to sacrifice the interests of small and medium-sized shareholders for their own interests.

　　In the explanation of the issue of high shareholding ratio of actual controllers, Liangang Optoelectronics and CITIC Securities not only gave relevant opinions, but also inquired about recent cases of listing, and listed 8 families with actual controllers similar to Liangang Optoelectronics. Listed companies with a high shareholding ratio.

　　Therefore, there are voices from the outside world saying that this is a "pull-and-step response" and a "hard-nosed" approach to the Shenzhen Stock Exchange.

　　On the evening of March 22, the Shenzhen Stock Exchange announced the launch of on-site supervision of CITIC Securities. The article mentioned that Liangang Optoelectronics and intermediaries have recently submitted responses to inquiries, but the responses are not clear enough and the issues involved have not been fully explained.

　　Although the Shenzhen Stock Exchange did not specify what the problems were, some people linked the matter to CITIC Securities' "tough" response, triggering a new round of associations.

　　CITIC Securities' stock price also closed sharply down to 4.88% on the 25th, the largest single-day decline since September 16, 2022.

  CITIC Securities daily K chart.

　　In this regard, some securities dealers told Sino-Singapore Finance reporters that some external statements are misunderstood, but there is indeed some chaos in the capital market, and stricter supervision is inevitable.

　　The statement issued by CITIC Securities also emphasized that the company has always firmly implemented various guidelines and policies of the party and the country, abided by various laws and regulations, respected the supervision and guidance of regulatory agencies, and safeguarded the rights and interests of investors. The statement also stated that in order to safeguard the company's legitimate rights and interests, the company reserves the right to pursue legal liability for those who publish and disseminate false information.

Are IPO project selection and review in place?

　　In recent years, with the implementation of the registration system, issuers' enthusiasm for listing has been further stimulated. However, under the conditions of the registration system, unannounced shareholding and "breaking through while sick" have frequently occurred.

　　In the context of "strict entry control", intermediaries such as sponsor agencies serve as "gatekeepers" and have become an important part of supervision.

　　The recently released "Opinions on Strictly Enforcing Issuance and Listing Access and Improving the Quality of Listed Companies from the Source (Trial)" requires the establishment of a normalized rolling on-site supervision mechanism for intermediaries to supervise and inspect sponsors, lawyers and registered companies. Accountants' performance of their duties.

　　The Shenzhen Stock Exchange also mentioned this time that "in order to further consolidate the 'gatekeeper' responsibilities of the sponsor and control the quality of the listing entrance from the source, it has decided to launch on-site supervision." From the perspective of the industry, this will also test CITIC Securities' performance here. Practice quality and risk control capabilities in sub-sponsored projects.

  Screenshot from the Shenzhen Stock Exchange official account.

　　In fact, the criticism that CITIC Securities has suffered this time is not unrelated to the frequent "accidents" in sponsored projects in recent years.

　　In November last year, *ST Zuojiang, sponsored by CITIC Securities, was investigated by the China Securities Regulatory Commission because the financial information disclosed in 2023 was seriously untrue and suspected of major financial fraud.

　　In January this year, the Hengyi Petrochemical convertible bond project it sponsored had a situation where the issuer suffered losses in the year when its securities were issued and listed, and its operating profit fell by more than 50% compared with the previous year. The China Securities Regulatory Commission issued a warning letter to CITIC Securities and fined two The sponsor representative takes supervisory dialogue measures.

　　Since this year, CITIC Securities has also withdrawn 7 IPO projects. Judging from the companies that have withdrawn orders, many may have problems with their own profit stability and internal control.

　　Frequent "flaws" in the selection and review of IPO projects have also led to questions from the outside world about the quality of practice of this leading securities company.

　　Recently, when answering reporters’ questions, Wu Qing, chairman of the China Securities Regulatory Commission, said that the current coverage of on-site inspections and on-site supervision is still very limited. The next step is to significantly increase the coverage exponentially, further increase the investigation and punishment of clues found in violations of laws and regulations, and insist on When reporting, one must take responsibility, which will force issuers to further improve the quality of reporting, and also force intermediaries to improve their practice and service levels and be diligent and responsible.

　　Obviously, for sponsors, only by selecting the best among the best in the future can they protect both others and themselves. (over)