Tianfeng Securities Co., Ltd. (601162) is embroiled in a deepening crisis as regulatory scrutiny intensifies and internal governance issues surface. The company is now locked in a legal dispute with its former vice president, Guo Shengbei, further exposing its internal turmoil.
**Public Feud: Whistleblowing and Litigation by Former VP** On December 11, the second trial of Tianfeng Securities' lawsuit against ex-VP Guo Shengbei commenced at the Shanghai No.1 Intermediate People's Court. The case highlights escalating tensions within the brokerage's leadership. Notably, in August 2023, Guo published an open letter titled "Eight Questions to Zhai Chenxi, Former Executive VP of Tianfeng Securities," accusing Chairman Yu Lei and others of misconduct.
Guo claimed he had repeatedly warned about credit bond risks but was pressured to increase positions, ultimately being blamed for a RMB 675 million loss in the first half of 2022 from real estate bond holdings. Tianfeng dismissed the allegations as "false," but the controversy deepened when Yu was placed under investigation in February 2025, followed by Zhai's disappearance and detention in November 2025.
What began as an employment dispute has now become a catalyst for exposing systemic governance failures at Tianfeng.
**Regulatory Probe Triggers Market Panic** On November 28, Tianfeng disclosed receiving a formal investigation notice from regulators over suspected "information disclosure violations and illegal financing." The stock plummeted when trading resumed on December 1, reflecting eroding investor confidence in the firm's controls.
Over 510,000 shareholders now face potential losses, with legal avenues opening for compensation claims. Shanghai Huzi Law Firm's Liu Peng team has registered hundreds of eligible claimants—those who bought shares before November 28, 2025, and sold after November 29 at a loss.
**Legacy Issues: "Contemporary Group" Fund Misuse** The probe traces back to historical capital misappropriation by former major shareholder "Contemporary Group." Between 2020-2022, the Hubei-based conglomerate and affiliates siphoned RMB 1.48 billion via third parties, with partial repayments. Though all funds were eventually returned by end-2022, the episode revealed critical internal control lapses, prompting exchange scrutiny.
State-owned Hongtai Group took control in 2023, inheriting governance challenges that extend beyond financial remediation.
As investigations progress, Tianfeng's saga underscores the high stakes of corporate accountability in China's financial sector.
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