Haitong Securities(600837) 智通财经·2024-04-19 15:19Core Viewpoint - Haitong Securities has received a notice of administrative penalty from the China Securities Regulatory Commission (CSRC) regarding violations related to stock transfer restrictions involving key individuals and companies [1][5]. Summary by Sections Investigation Findings - The investigation revealed that Wang Zelong and others engaged in a series of transactions that effectively allowed them to participate in a non-public stock issuance while circumventing the lock-up period [1][4]. - The transactions involved recommending a derivative trading scheme that enabled early profit realization from a non-public stock issuance [1][2]. Transaction Details - From July to August 2022, CITIC Zhongzheng recommended a plan for Wang Zelong to engage in arbitrage through a non-public stock issuance of Zhonghe Titanium White Co., Ltd. [1][2]. - The plan involved borrowing shares from an employee stock ownership plan and executing derivative trades to lock in profits before the lock-up period ended [1][2]. Financial Outcomes - Wang Zelong ultimately realized a profit of approximately RMB 58.16 million, while other participants also gained significant profits through the scheme [4][5]. - The total illegal gains from the transactions amounted to RMB 77.53 million, which will be confiscated as part of the penalties [5][6]. Penalties and Legal Consequences - The CSRC proposed fines totaling RMB 120 million for the involved parties, with specific allocations based on their roles in the violations [5][6]. - Wang Zelong faces an additional fine of RMB 2 million for failing to disclose his participation in the non-public issuance [6]. Company Response - Haitong Securities has acknowledged the penalties and committed to improving compliance and internal control mechanisms to prevent future violations [7].