Brokerages and Law Firms Involved in IPO Fraud Are Added to CSRC Blacklist
Yicai Global
/SOURCE : Yicai
Brokerages and Law Firms Involved in IPO Fraud Are Added to CSRC Blacklist

(Yicai Global) June 22 -- The China Securities Regulatory Commission will no longer accept documents submitted by intermediary institutions Southwest Securities Co., Industrial Securities Co., Jingtian & Gongcheng Law Firm and East Bright Law Firm, and will suspend any projects currently underway.

Industrial Securities and East Bright Law Offices are implicated in the current investigation by the CSRC into Dandong Xintai Electric Co. [SHE:300372]. The electrical equipment manufacturer is accused of providing false financial documents in its initial public offering application two years ago.

Similarly, Southwest Securities and Jingtian & Gongcheng are involved in an investigation into IPO fraud committed by Henan Dayou Energy Co. [SHA:600403] in 2012, according to sources. As administrative penalties cannot be imposed on an offence not discovered within two years, it is unlikely that a case will be filed against Dayou Energy.

Zhongjin Wanxin Certified Accountants were involved in releasing false information in the Dayou Energy's 2013 semiannual report, and although they have not been included in the blacklist, the CSRC has issued a warning against them.

Since CSRC Chairman Liu Shiyu took office in February, capital market regulation has tightened. A new policy on backdoor listing was introduced last Friday, stressing the role played by independent financial advisors in the reorganization of assets.

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