jackpotcasino| Securities business suspended for half a year! The institution was severely punished and was also "fired" by its customers

Source: brokerage China

Another intermediary is regulated to restrict its business.

RecentlyJackpotcasinoAccording to the Chinese reporter of the securities firm, he learned from a person close to Dahua accounting firm thatJackpotcasinoThe accounting firm was suspended from securities service business by Jiangsu Securities Regulatory Bureau for six months, and the penalty was related to Jin Tongling, a listed company.

This means that three intermediaries have fallen into a whirlpool as a result of Jin Tongling's fake case over the past six years.

Dahua Accounting firm issued a statement saying that it sincerely accepts the punishment decision of the regulatory authorities, consciously accepts the supervision of various regulatory agencies, corporate customers and all sectors of society, and carries out comprehensive rectification and reform as required, and organizes profound self-reflection within the scope of the institute.

The reporter noted that more than 10 listed companies, including ST Interstate and Booz Software, have cancelled the re-employment of Dahua as the audit institution for the year 2024.

In terms of projects under review of equity financing, according to the statistics of Chinese reporters of securities firms, as of May 12, Dahua accounting firms had a total of 38 IPO projects queued on the exchange, with 10 refinancing and 2 mergers and acquisitions. According to the regulations, if the intermediary is taken to restrict business activities and other measures have not been lifted, the relevant projects under review need to suspend the audit. What variables will there be in the future are worthy of continued attention.

The auditor was suspended for half a year.

A Chinese reporter from a securities firm learned from a person close to Dahua that Dahua has been issued a written decision on administrative punishment by the Jiangsu Securities Regulatory Bureau, and the accounting firm has been suspended from securities service for six months until November this year.

This punishment involves money and psychic programs. According to Wind data, Dahua Accounting firm provided audit services to listed company Jin Tongling for seven years (2017-2023).

As early as early January this year, Jiangsu Securities Regulatory Bureau punished Jin Tongling. The total amount of falsely increased or reduced profits of the listed company from 2017 to 2022 accounted for 103 of the company's total disclosed profits (absolute value) respectively.Jackpotcasino.06%, 133Jackpotcasino.10%, 31.35%, 101.55%, 5774.38%, 11.83%, resulting in false records in the company's corresponding annual report. The Jiangsu Securities Regulatory Bureau ordered Jin Tongling to correct, gave a warning and imposed a fine of 1.5 million yuan. The relevant Dong Jiangao was also given a warning and fined.

Dahua Accounting firm issued a statement, "the punishment reflects the gap in dealing with the new situation, new tasks and new challenges, and the deficiencies in risk awareness, internal governance and quality control." Dahua accounting firm said it deeply apologized to the customers and partners affected by this.

Dahua accounting firm said that it learned from the bitter experience, learned lessons, faced difficulties squarely, faced up to deficiencies, solved problems, adhered to practice standards, resolutely implemented the professional responsibility of financial and accounting supervision, and effectively performed its duties as a "gatekeeper" in the capital market. We will fully implement the requirements of regulators, improve risk control standards, enhance the ability and level of practice, and improve the internal governance system and quality management system.

Dahua accounting firm and Huaxi Securities basically received advance notification of the penalty in mid-early April, but Dahua's application for reconsideration led to the late arrival of the penalty, the person told brokerage Chinese reporters.

As a sponsor of Jin Tongling's fixed increase project in 2019, Huaxi Securities was fined for failing to do its duty diligently. At the end of April, Jiangsu Securities Regulatory Bureau said that in the course of the practice of the project, Huaxi Securities had untrue records in due diligence, false records in the letter of recommendation for the listing of stocks issued to specific targets, false records in the relevant reports issued during the continuous supervision phase, and inadequate implementation of on-site inspection, and decided to take regulatory measures to suspend the qualification of sponsor business for 6 months. The suspension period is from 28 April to 27 October 2024.

In addition to the two institutions, one brokerage was fined. It is reported that Jin Tongling not only made a fixed increase, but also made a non-public offering in 2017. At that time, the continuous supervision institution of the project was Guohai Securities. On April 10, because Guohai Securities failed to fulfill its continuous supervision obligations diligently and dutifully in the course of performing the continuous supervision duties of the Jin Tongling fixed increase project in 2017, there were false records in the continuous supervision on-site inspection report. the procedures for the release of the continuous supervision report are not in line with the regulations, Jiangsu Securities Regulatory Bureau issued a warning letter to Guohai Securities.

Customer project impact measurement

The market pays attention to the impact of the above administrative penalties on the client projects of Dahua Accounting firm.

According to Wind data, so far, more than 400 listed companies have hired Dahua accounting firm as audit institutions, and the number of clients of listed companies ranks third.

Several industry insiders said that considering that the penalty was landed after April, the 2023 annual reporting season was over, while the suspension until November this year is expected to have a limited impact on the audit business of Dahua listed companies in 2024.

It is reported that Dahua CPA firm also sent a letter to clients saying that during the suspension of securities service business, there is no legal obstacle to your board of directors and shareholders' meeting appointing Dahua CPA firm as the audit institution of the 2024 annual report.

However, the reporter noted that recently, a number of listed companies have announced the cancellation of the re-employment of Dahua as the 2024 audit institution. For example, Booz Software said on May 13 that due to the administrative penalty imposed on Dahua, the board of directors agreed to cancel the re-employment of Dahua as the company's 2024 audit agency based on the principle of prudence.

For example, ST Intercontinental also said that recently, in view of the fact that the relevant matters related to the proposed employment of accounting firms have yet to be further verified by the company, based on the principle of prudence, the company intends to cancel Dahua's financial audit institutions and internal control audit institutions in 2024, and communicated with them in advance on the cancellation of appointment and related matters. Dahua has no objection to the cancellation of the appointment of accounting firms this time.

For equity financing projects that are queuing up for review, they may be hit. According to the reporter's statistics on the projects under review by the three exchanges, Dahua accounting firms have a total of 50 projects waiting in line for examination, of which 38 are IPO projects, 10 are refinancing, and 2 are mergers and acquisitions.

Many of the projects are making rapid progress. For example, Dongfang Electric fixed increase project and Leiyi Zhi Zhi convertible bond project have reached the stage of "submitting registration"; Iffonda IPO project has passed.

According to the newly revised rules for the examination and approval of Stock issuance and listing on April 30 this year, if the sponsors and securities service institutions of IPO enterprises are taken by the CSRC to restrict business activities, order suspension of business for rectification, designate other institutions to take custody or take over, and other measures have not been lifted, then the examination of issuance and listing shall be suspended.

In this context, IPO enterprises can choose whether to change intermediaries or not. According to the above-mentioned rules for the examination and approval of Stock issuance and listing, if replaced, the sponsor or securities service institution after the replacement shall, within three months from the date of suspension of the examination, complete the due diligence and reissue the relevant documents, and review the documents issued by the original securities service institution, issue review opinions, and explain the differences. If it is not replaced, the securities service institution shall issue a review report to the exchange in time.

However, some industry insiders believe that under the background of the slowdown of the current IPO audit cycle, the urgency of IPO enterprises to change intermediaries may not be as urgent as in the past.

There have been too many tickets in recent years.

Judging from the punishment situation in recent years, Dahua Institute has been punished by the Securities Regulatory Commission for many times, and the quality of practice needs to be improved.

In March 2023, the CSRC issued a written decision on administrative punishment to Dahua Accounting firm, which involved the Zhangzi Island project. It is reported that the 2016 annual audit report of Zhangzi Island Group issued by Dahua has a false record; it has not been diligent and responsible in the audit of the 2016 annual financial statements of Zhangzi Island Group. To this end, the CSRC ordered Dahua Institute to make corrections, confiscated 1.2264 million yuan of business income and imposed a fine of 2.4528 million yuan.

In 2022, Dahua Accounting firm was punished by the Securities Regulatory Commission for the Oriental Jinyu project. The investigation of the CSRC found that Dahua Accounting firm did not do its duty diligently in the audit of Dongfang Jinyu's 2017 financial statements, and there were false records in the audit report of the 2017 financial statements; the procedures for risk identification and assessment were not in place; there were major defects in the internal control testing procedures; and there were major defects in the substantive audit procedures related to procurement, sales and inventory. Before accepting the entrustment, he did not make the necessary communication with the former certified public accountant and failed to obtain sufficient and appropriate audit evidence on the opening balance. The CSRC also ordered Dahua Accounting firm to make corrections, confiscating 1.1 million yuan of business income and imposing a fine of 2.2 million yuan.

In addition, Dahua accounting firm has also issued warning letters due to illegal practice in Qinshang shares, Century Dingli, Si Sheng Energy, Skyline shares and other projects.

On March 15 this year, in order to further improve the quality of listed companies, the CSRC issued the "opinions on strengthening the Supervision of listed companies (for trial implementation)", which clearly mentioned the responsibility of compacting intermediary agencies.

According to the "opinion," audit and evaluation institutions are firmly committed to "double investigation of one case," filing cases in parallel, heavier penalties for illegal cases such as collusion and fraud, and intermediary agencies that violate major laws and regulations. We will resolutely implement such systems as suspending or banning securities service business, revoking practice licenses, and banning employees from entering. If an audit and evaluation institution reports to the regulatory department the clues of fraud and embezzlement found in practice, it shall be given a lighter or mitigated punishment in accordance with the law.