Question 1 to the CSRC: Are you planning to let fund investors take over the shares in the expansion of the Beijing Stock Exchange again? Aren’t you cutting the leeks fast enough?
Today, the Beijing Stock Exchange 50 index rose sharply by 11% along with the news of the CSI Index, but closed up only over 4%, with the trading volume increasing tenfold to a staggering 10 billion yuan compared to the low tide.
It reminds people of the lively scene when the STAR 50 was listed:
More than three years have passed, and all the fund investors who bought the STAR 50 at that time have suffered heavy losses. Seeing that the STAR Board has been halved and no new shares can be issued, the Beijing Stock Exchange immediately lowered the threshold, becoming the same as the STAR Board. May I ask if you are like a bear eating corn, breaking one and throwing one away? What is the basis for the same threshold for the STAR Board and the Beijing Stock Exchange?
On the one hand, it claims to have a sound investor classification system, and on the other hand, it constantly opens new venues for its own selfish interests, but how is the layering and classification between venues reflected? May I ask what level of investment product the Beijing Stock Exchange belongs to? Why do securities firms dare to open all the accounts of the Beijing Stock Exchange for all STAR Board investors? Is the investor classification system just a blank sheet of paper? Are you saying that the 20cm harvest is not fast enough, and using a 30cm sickle to harvest faster?
Every time a stock exchange expands greatly, the funds are using the money of fund investors to wantonly squander at the high point of the index. Where is your fiduciary duty? The confidence of fund investors in the funds is already at the bottom. Do you want fund investors to completely lose confidence in the funds?
Question 2 to the CSRC – Punishing fraudulent companies with three cups of wine, how to talk about strictly cracking down on fraud?
Recently, two fraud incidents have been reported, which are a slap in the face of the Chinese capital market. What are you doing?
1. Xilong Science’s performance fraud: According to the facts ascertained by the Guangdong Securities Regulatory Bureau’s ‘Administrative Penalty Decision’, Xilong Science’s 2020, 2021 annual reports, and 2022 semi-annual report contained false records. Within two and a half years, Xilong Science cumulatively inflated revenue by 2.841 billion yuan; cumulatively inflated profits by 23.2641 million yuan.
Look at this news report, don’t you think it’s ridiculous? A company that has cumulatively committed fraud of 2.8 billion yuan, close to the company’s total market value, the person involved was only fined hundreds of thousands of yuan, which is called zero tolerance. You might as well issue a red flag to praise them for their performance fraud not reaching the 50% red line.
May I ask whether the accounting firms that issued standard unqualified opinions in the past two years should be thoroughly investigated? According to the standards of the Enron incident, this kind of company and accounting firm is enough to die 100 times.
The ridiculous thing is that the policies you have formulated are deliberately protecting the fraudulent listed companies? As long as the proportion of performance fraud does not reach 50% of the revenue, you encourage fraud, and you just fine a few hundred thousand yuan. You might as well openly tell everyone that you only need half of your performance in the future, and the rest can be fraudulent, and then pay a fine of hundreds of thousands of yuan, saving money and effort!
2. Jintongling fraud case
On the evening of November 20, Jintongling announced that the company received the ‘Administrative Penalty Prior Notice’ issued by the Jiangsu Regulatory Bureau of the China Securities Regulatory Commission on November 17. The ‘Notice’ shows that Jintongling’s annual reports from 2017 to 2022 contained false records, suspected of violating relevant laws and regulations. The Jiangsu Regulatory Bureau intends to order the company to correct, give a warning, and impose a fine of 1.5 million yuan; give a warning to the then senior executives Ji Wei, Yuan Xueli, Xu Kunming, and Mao Xinpeng, and impose a total fine of 4.2 million yuan.
After investigation, from 2017 to 2022, Jintongling and its wholly-owned subsidiaries Shanghai Yuneng Energy Technology and Jiangsu Yuneng Energy Technology, through forging project progress confirmation forms, delivery orders, etc., adjusted the completion progress (performance progress) of EPC general contracting projects, falsely increased or decreased the operating income and total profit of 12 companies; Jintongling and its holding subsidiary Taizhou Fengling Special Power Station Equipment, through confirming revenue in advance without delivery, not offsetting revenue for sales returns, and other methods, falsely increased operating income and total profit.
Among them, in 2017, 2018, 2021, and 2022, Jintongling falsely increased operating income by 501 million yuan, 550 million yuan, 68.9307 million yuan, and 15.3085 million yuan respectively, and falsely increased total profit by 146 million yuan, 148 million yuan, 73.9871 million yuan, and 43.3273 million yuan respectively; in 2019, Jintongling falsely decreased operating income by 197 million yuan, and falsely decreased total profit by 38.5277 million yuan; in 2020, Jintongling falsely decreased operating income by 5.3768 million yuan, and falsely increased total profit by 5.73008 million yuan.
The Jiangsu Securities Regulatory Bureau believes that Jintongling is suspected of violating the 2005 ‘Securities Law’ and relevant provisions of the ‘Securities Law’, constituting the illegal acts described in Article 193, Paragraph 1, and Article 197, Paragraph 2, of the 2005 ‘Securities Law’.
I’m puzzled, why did you bring out the 2005 Securities Law? What about the new Securities Law? What about the fallback clauses? A company has been committing performance fraud for 6 consecutive years, and it’s only a few million yuan in fines. What is the basis for this?
You didn’t say that at the beginning of the year! At that time, you said that you would strictly investigate fraud according to the new Securities Law!
Why did you have to pay a fine of 40 million yuan for 4 years of fraud at the beginning of the year, but now the fines are getting less and less? Where is the standard of the Securities Law? Is it just your word that counts, is it so casual? How do you implement the ‘Opinions on Strictly Cracking Down on Securities Activities’ issued by the Central Office and the State Office? Where is the strictness? Is the wine fined this time Maotai?
You fine the speculators manipulating securities for billions or tens of billions. It feels like this market doesn’t welcome traders, only welcomes fraudsters? I don’t know whether it is fraud or manipulating stock prices that causes more harm to investors and the market, but a registration-based market, if there are no severe penalties to limit fraud, this market will definitely have no hope.
Question 3 to the CSRC – What does the registration system that controls the pace of issuance mean?
Compared with the IPOs in the first few months of this year, which couldn’t even be turned over in one page, the IPO issuance speed in October-November has slowed down significantly. Now there is a ridiculous saying: to control the number of issuances on the Shanghai and Shenzhen Stock Exchanges at 50-100 per year, and the rest will be transferred to the Beijing Stock Exchange. It is said that there is another half sentence: issue more when the market is good.
As an old stock investor, I am no stranger to the suspension of A-share IPOs. Historically, this trick will be used every time there is a big drop, so that the leeks can take a break and grow another crop before being cut. But now you are all registration-based, controlling the pace of issuance under the registration system, and letting everyone go to the Beijing Stock Exchange to issue, and then come back when the market is good. What do you think of our investors? A public toilet, can you go whenever you want?
In short, under the registration system, new shares can be issued at will. If there is fraud, they will be fined to bankruptcy, and naturally no one will dare to come and cheat money. But now, on the one hand, it is called a comprehensive registration system, and on the other hand, fraud is not absolutely equal to absolutely not fraud. Are you here to supervise, or are you here to embezzle? If the zjh really can’t manage it, it’s better to let the zjw come directly, and we raise our hands in favor. If you really don’t want to play, just disband it.
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