Investors affected by the case can register their claims on Sina's investor rights protection platform.
On December 5, 2025, First Capital Securities Underwriting and Sponsorship Co., Ltd. (hereinafter referred to as First Capital Securities), the lead underwriter and sponsor of Hongda Xingye Co., Ltd.'s 2019 convertible bonds, received a "Prior Notice of Administrative Penalty" from the Jiangsu Regulatory Bureau of the China Securities Regulatory Commission (CSRC).
The Jiangsu Regulatory Bureau found that First Capital Securities allegedly failed to fulfill its due diligence obligations during the ongoing supervision period of Hongda Xingye's 2019 convertible bond project. The violations include: insufficient verification of the use and repayment of raised funds; failure to issue review opinions as required, leading to false records in relevant supervision documents; and failure to fulfill reporting obligations as stipulated. These actions allegedly violate Article 11(2) and Article 10(2) of the Securities Law (2005), constituting violations under Article 192 of the Securities Law (2005) and Article 182 of the current Securities Law.
Given these violations, the Jiangsu Regulatory Bureau proposed penalties, including ordering First Capital Securities to rectify its conduct, issuing a warning, confiscating sponsorship income of RMB 4,245,283.02, and imposing a fine of RMB 12,735,849.06. Sponsorship representatives Song Yao and Fan Benyuan were also warned and fined RMB 1.5 million each.
Previously, on June 27, 2025, Hongda Xingye announced penalties from the CSRC for information disclosure violations. The CSRC investigation identified the following violations: 1. Hongda Xingye擅自 changed the use of funds raised in 2019 without authorization. 2. The company's annual reports from 2019 to 2022, its 2023 semi-annual report, and related reports on fund usage contained false records. 3. Hongda Xingye failed to disclose material litigation, arbitration, and guarantee matters in a timely manner.
Under relevant laws, if the CSRC ultimately determines that First Capital Securities failed in its due diligence obligations during the supervision of Hongda Xingye's 2019 convertible bond project, the firm may be held liable for compensating investors for losses caused by these violations.
**Claim Details** According to securities laws, listed companies and responsible parties must compensate investors for losses caused by false statements.
Per the CSRC's findings, investors who purchased Hongda Xingye shares or convertible bonds between January 6, 2020, and September 22, 2023, and continued to hold or sold at a loss after September 23, 2023, may claim compensation for investment losses.
The above claim conditions are based on the opinion of lawyer Chen Yuxia and do not constitute investment advice. Final eligibility will be determined by the court.
**Required Materials for Claims** 1. Stock transaction records (including full ID numbers or shareholder information if not shown). 2. Copy of ID card.
**Attorney Fees** For legal representation, such cases typically operate on a contingency basis, with no upfront fees. Fees are paid as a percentage of compensation awarded if the case is successful.
(This article is contributed by lawyer Chen Yuxia of Yingke Law Firm (Hangzhou) and does not represent the views of Sina Finance. Lawyer Chen Yuxia has successfully represented investors in securities misrepresentation cases against multiple listed companies.)
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