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A single project took 5 million yuan in rebates, and “underwriting rules” for bond underwriting were sentenced


2020-07-03 19:07:18Beijing News reporter: Zhang Siyuan Editor: Yue Caizhou
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A single project took 5 million yuan in rebates, and “underwriting rules” for bond underwriting were sentenced

2020-07-03 19:07:18Beijing News reporter: Zhang Siyuan

According to a recent criminal judgment disclosed by the Judgment Documents Network, Zhang Rukai, former deputy director of the Lianyungang Local Financial Supervision Administration, was sentenced to 13 years for a bribery and bribery offences, and was fined 700,000 yuan. In the accused unit’s bribery crime, the “unspoken rules” of bond underwriting, which has been criticized for a long time, appeared again.

The Beijing News Shell Finance News (Reporter Zhang Siyuan) According to a recent criminal judgment disclosed by the Judgment Document Network, the former deputy director of the Lianyungang Local Financial Supervision Administration Zhang Rukai was sentenced to 13 years for bribery and bribery, and a fine of 700,000 yuan . In the accused unit’s bribery crime, the “unspoken rules” of bond underwriting, which has been criticized for a long time, appeared again.

One bond issuance rebate of 5 million yuan


According to the judgment document, in 2011, a company planned to issue the second phase of corporate bonds. In order to undertake the bond underwriting business, Huayi Securities Co., Ltd. agreed with a company that Huayi Securities Co., Ltd. should act as the lead underwriter of the bond. , A certain China Securities Co., Ltd. paid a company a rebate of 5 million yuan. At that time, the legal representative and general manager of a certain company, Zhang Rukai, arranged for a company under actual control of a company to sign a false agreement with a certain securities company in the name of a bond sales consultant fee.

After the successful issuance of the second-stage corporate bonds of a company, Huayi B Securities Co., Ltd. was transferred to Chuangyi Company for 5 million yuan. In 2013, Chuangyi Company distributed the 5 million yuan and other income as a distributable profit among shareholders. Among them, in addition to the payment of various taxes and fees of 773,300 yuan, a shareholder company, Shanghai Evergreen Asset Management Management Co., Ltd. and Jiangsu Yashi Investment Group Co., Ltd. distributed dividends of RMB 197.22 million, RMB 112.73 million, and RMB 112.73 million respectively.

From the review of the live trial of Zhang Rukai’s acceptance of bribery published on the China Trial Open Network, the Huaxi Securities Co., Ltd. and Huaxin Securities Co., Ltd. involved in the case are Jiangsu Xinhailian Development Group. According to public information, Zhang Rukai was the legal representative and general manager of Jiangsu Xinhailian Development Group.

However, Zhang Rukai did not admit this accusation. In his defense, he said that the 5 million yuan in the account of Chuangyi was a concession for the issuance of bonds by Huayi Securities Co., not a rebate received outside the account. However, the court did not agree with this statement, “After investigation, in order to obtain a competitive advantage in obtaining a company’s credit underwriting business, Huayiyi Securities Co., Ltd. promised to give a company 5 million yuan as a rebate after successful bond issuance. “Huayi Securities Co., Ltd. provided assistance in underwriting the corporate bond underwriting business”. The court found that the act was in line with the requirements of the bribery unit.

According to the testimony of a witness, Zhang Mouzheng, in 2011, Xinhailian Development Group announced that it was preparing to issue the second bond. At that time, the contact Xu Moubing proposed that a leader agreed that Hualin Securities should be responsible for the issuance of a bond, but the group Leaders hope that Hualin Securities can support the 5 million yuan fund of Chuangyi Company. Zhang Mouzhuo and Xu Moubing agreed to sign a false agreement to pay 5 million yuan to the account of Chuangyi Company in the name of “consultant fee”. This is the money that Jiangsu Xinhailian Development Group asked Hualin Securities for. Yiyi Company has not provided services for Hualin Securities.

And Xu Moubing also said that one day in the second half of 2011, in the office of Zhang Rukai, Zhang Rukai, Zhang Mougeng and him discussed the 5 million affairs of Hualin Securities, because he was the general manager of Chuangyi Company at the time, and his pre-stage The rebate talked with Hualin Securities, in order to reduce the knowledge, Zhang Rukai decided to put it on the account of Chuangyi. This money is actually a rebate from Hualin Securities Co., Ltd. to Jiangsu Xinhailian Development Group for contractual issuance of a company’s second-stage bond issuance.

Small and medium scale, Hualin Securities investment bank business under pressure?


According to the “Summary of Corporate Bond Prospectus for Jiangsu Xinhailian Development Group Co., Ltd. 2012”, the total issuance is 1.3 billion yuan, and the main underwriter is “Hualin Securities”.

The reporter reviewed the statistics of the securities underwriting business of securities companies released by the China Securities Association in 2011. In that year, the number of Hualin Securities stock and bond underwriters was 15th, ranking 18th; the total amount was 15.65 billion yuan, among 81 securities companies. Ranked 20th, the median index for the year was 5.479 billion yuan. It is worth noting that Hualin Securities had no income in the main underwriting business of stocks during the year, and the above-mentioned income amounts all came from bond underwriting.

In 2012, the China Securities Association did not publish the ranking of securities companies’ performance on this indicator.

In the special statistics on bond underwriting business released by the China Securities Association in the first quarter of 2020, 23 securities companies undertook the issuance of green corporate bond underwriters or managers of green asset securitization products (Shanghai and Shenzhen Stock Exchange), underwriting 21 products. The total amount is 19.773 billion yuan, of which 3 asset securitization products are 3.923 billion yuan. Five securities companies underwritten and issued 5 innovative and entrepreneurial corporate bonds with a total amount of RMB 3.02 billion. A total of 65 securities companies participated in the bidding of local government bonds amounted to 203.148 billion yuan, a total of 16 bid winners.

Among them, Hualin Securities actually won the bid of 990 million yuan in local government bond projects, ranking 40th; the number of actual bidding regions was 6 and ranked 37th; in green corporate bonds (including asset securitization products), innovation and entrepreneurship company bonds None of them has a lead underwriter seat.

According to wind statistics, in the investment banking business, Hualin Securities, as a small and medium-sized securities firm, has limited business development. From the beginning of 2020 to July 3, Hualin Securities had only 111 stock and bond underwriting projects, of which, 2 IPO projects accounted for about 1.47% of the market; 4 convertible bond projects accounted for 3.08% of the market share ; 105 local government bond projects, accounting for 0.94% of the market share; other projects such as corporate bonds, corporate bonds, financial bonds, ABS, additional issuance, and share placement projects have received nothing.

Brokerage business is still the main component of Hualin Securities’ income. According to the 2019 Hualin Securities Annual Report, during the reporting period, Hualin Securities achieved a total revenue of 1.011 billion yuan, an increase of 0.98% year-on-year; it achieved a net profit of 442 million yuan, an increase of 28.14% year-on-year. Net profit both declined year-on-year.

From the perspective of income structure, the credit and brokerage business realized 470 million yuan, accounting for 46.49% of the total revenue, which is the main source of income for Hualin Securities; the investment bank business revenue was 91 million yuan, accounting for 9.04% of the total revenue; asset management business Revenue was 82 million yuan, accounting for 8.08% of total revenue; self-operated business revenue was 216 million yuan, accounting for 21.39% of total revenue.

In the same year, the securities investment bank business completed one M&A and restructuring project, one ABS project, four new third board scheduled addition projects, and seven financial advisory projects. Hualin Securities said that in 2019, affected by the slowdown of economic growth and frequent defaults in the bond market, the company further strengthened the risk management of bond projects, raised the entry threshold for bond projects, and the business scale decreased accordingly.

The industry’s “unspoken rules” repeatedly prohibit?


Bond underwriting rebates in the industry, especially among small and medium-sized brokers, were once known as “unspoken rules”.

At the beginning of this year, the Hubei Provincial High Court also made a criminal ruling on bond underwriting rebates. According to the ruling, a senior executive of an investment group in Wuhan used his position to acquiesce his subordinates to designate corporate bond issuance and underwriting business to Western Securities. , And collect 30% of the bond underwriting income as rebates for each business, the two received a total of more than 14 million rebates in two years. The court finally sentenced him to 10 years in prison and a fine of 500,000 yuan. All the stolen money was turned over to the State Treasury.

According to industry insiders,

In the era of “brutal growth” of investment banking business, large brokers held most of the resources, and small and medium-sized brokers wanted to fight for investment banking projects. Gifts and rebates to the person in charge were almost “unspoken rules”. The percentage of rebates is often 5%. -30% varies, closely related to the popularity of the project.

In June 2018, the Securities Regulatory Commission in the “Provisions on the Corrupt Practices of Securities and Futures Institutions and Their Staff” (“Regulations”) prohibits all types of securities and futures institutions and their staff from engaging in various forms in securities and futures business activities. Transmit and seek improper benefits.

This rule clearly draws a “red line” for securities practitioners, and also has clear rules for some gray areas in the past. “After the implementation of the regulations, there will indeed be special attention in the business development, and the company has also specially organized the learning. For such acts, it is explicitly prohibited, and the company also has corresponding penalties for this matter.”

However, with regard to the rebate of Hualin Securities in bond underwriting, the reporter has not checked the relevant administrative supervision and punishment measures on the official website of the SFC.

Beijing News reporter Zhang Siyuan edited Yue Caizhou proofreading Li Xiangling

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