Recently, listed company SiERT announced that it received a "Notice of Case Transfer for Review and Prosecution" from Xuancheng Public Security Bureau and a "Notice of Appointing Legal Representative/Applying for Legal Aid" from Xuancheng People's Procuratorate. In addition to the company's former executives, Sun Bin, a sponsor representative from Guoyuan Securities Co.,Ltd. who served as sponsor for two of the company's projects, also appeared on the list, suspected of job-related embezzlement and bribery of non-state personnel.
The announcement stated that the main content of the "Notice of Case Transfer for Review and Prosecution" from Xuancheng Public Security Bureau was: "Regarding the case of Jin Zhenghui and others suspected of job-related embezzlement, our bureau believes the criminal facts are clear, evidence is solid and sufficient to establish guilt. The case is now being transferred to Xuancheng People's Procuratorate for review and prosecution."
The main content of the "Notice of Appointing Legal Representative/Applying for Legal Aid" included: "Our office has received case materials from Xuancheng Public Security Bureau regarding criminal suspects Jin Zhenghui, Fang Jun, Huang Xili, Tian Minghua, Jin Guoqing, Yao Jing, Wen Jibing, Zhou Shaowu, Sun Bin and others suspected of job-related embezzlement; Fang Jun, Sun Bin and others suspected of bribery of non-state personnel; and Jin Guoqing, Fang Jun, Yao Jing, Wen Jibing, Ma Lei and others suspected of fraud and illegal issuance of VAT invoices."
Notably, the aforementioned list includes not only SiERT's former executives but also personnel from securities service intermediary institutions. According to the company's past project information, the list includes Guoyuan Securities representative Sun Bin, who served as sponsor for two of the company's projects.
SiERT's historical financing project information shows that after the company went public in 2011, it conducted four refinancing rounds between 2014 and 2019 through corporate bonds, private placements, and convertible bonds, all with Guoyuan Securities Co.,Ltd. serving as the sponsoring institution. Sponsor representative Sun Bin appeared on the sponsor list for two key financing projects: first, a private placement in September 2015 that raised 1.07 billion yuan; second, a convertible bond project with a face value of 800 million yuan issued in 2019.
The "Notice of Case Transfer for Review and Prosecution" disclosed that Sun Bin is suspected of job-related embezzlement and bribery of non-state personnel. Job-related embezzlement refers to employees of companies, enterprises, or other organizations using their position to illegally appropriate organizational property for personal gain in relatively large amounts. Bribery of non-state personnel refers to such individuals using their position to solicit or illegally receive others' property in exchange for providing benefits, in relatively large amounts.
Previously, Shanghai No. 2 Intermediate People's Court pointed out in a Guangfa Securities sponsor representative case ruling that sponsoring institution personnel using their position during critical stages of a prospective listed company's capital increase to make low-priced strategic investments constitutes illegally receiving substantial equity benefits from the prospective listed company in the form of transactions. Such behavior not only violates securities law but also constitutes bribery of non-state personnel.
In recent years, to prevent illegal and criminal activities by sponsor representatives and other intermediary personnel, regulatory authorities have continuously strengthened oversight, building a comprehensive constraint system and increasing the cost of illegal activities.
In 2024, the Securities Association of China revised the "Sponsorship Business Rules," achieving two major breakthroughs in sponsor representative regulation: first, adding a new "Category D List (Business Suspension Category)" - once included in Category D, sponsor representatives temporarily lose signing qualifications, directly affecting career development; second, strengthening "accountability upon filing," requiring sponsor representatives to take lifelong responsibility for the authenticity and completeness of project filing materials. Even if projects are withdrawn or rejected, responsibility records must be maintained, compelling sponsor representatives to remain prudent throughout the entire project cycle.
Industry insiders believe that continuous regulatory strengthening and accountability for sponsor representatives can compel securities firms to enhance quality internal controls, be more prudent in project selection, and drive investment banking business to return from being mere conduits to their fundamental roles of pricing and risk identification. This accelerates industry survival of the fittest, further solidifies intermediary institutions' responsibilities as "gatekeepers" of capital markets, improves listed company quality, and maintains fairness and order in capital markets from the source.
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