The Investigation Results Of Jiuding Group'S Case Filing: Two Years Ago, It Has Promoted The Strategic Transformation, And The 16 Trillion Private Placement Bid Farewell To The "Rash Era"

Jiuding group, which had caused great shock in the industry, was put on file for investigation, and finally came to an end.

On January 14, Jiuding group announced that it had received the prior notice of administrative punishment from the CSRC on Jiuding group and its controlling shareholders, and that Jiuding group and its controlling shareholders would face fines respectively for "Information Disclosure Violation" and "holding on behalf of others".

The 21st century economic reporter consulted the announcement issued by Jiuding group and found that it had accepted the punishment decision of the CSRC at the first time.

Since March 23, 2018, Jiuding group announced that it was registered and investigated by the CSRC. In the past three years, the capital market has changed greatly. The top-level supervision system of private placement industry is improving day by day, and the era of rashness is ending, and the origin of "private placement" and "investment" is really returning.

As the first initiative to connect with the capital market, and with the rapid expansion of the "factory" PE mode, Jiuding group has brought numerous imitators. However, with the "one stroke" of supervision, the investigation results of Jiuding group also become the footnotes of the era from disorder to maturity of the private equity industry.

Jiuding investigation results announced

On January 14, Jiuding group disclosed the latest announcement, and the company received the advance notice of administrative punishment from the CSRC, which showed that Jiuding group was fined 600000 yuan due to the violation of the regulations in the second fixed increase of CITIC in 2014; at the same time, the controlling shareholder of the company was fined 600 million yuan for involving small shareholders to hold shares on their behalf.

Data shows that before the second fixed increase of Jiuding group, its controlling shareholder Tongchuang Jiuding Investment Holding Co., Ltd. (hereinafter referred to as Jiuding holding, the actual controllers Wu Gang, Huang Xiaojie, Wu Qiang, Cai Lei and Qin Zhengyu) signed share transfer agreements with 161 units and individuals, which agreed that Jiuding holdings would issue shares of Jiuding group for the second time The fixed price and number of shares were transferred to the above 161 units and individuals respectively.

At the same time, it is also agreed that Jiuding holding "coordinates other shareholders of Jiuding investment (now Jiuding group, the same below) to transfer the same amount of shares of Jiuding investment to Party A (i.e. 161 units and individuals)" at the same price, which also belongs to Jiuding holding's completion of the share transfer obligation.

Through a series of arrangements, it exchanged shares with relevant fund share holders after the second directional offering. After the second directional offering, the actual number of shareholders of Jiuding group has exceeded 200, reaching 335, which should be reported to the CSRC for approval according to law. However, Jiuding group only follows the superficial form of the second directional offering (i.e., on the surface, the number of shareholders after the issuance) No more than 200 people) have fulfilled the filing procedures of the national share transfer system for small and medium-sized enterprises.

Meanwhile, Jiuding group was punished by the CSRC for "deliberately concealing the number of shareholders who actually subscribed for the directional issuance shares and making false records in the information disclosure documents such as the stock issuance plan, so as to achieve the purpose of avoiding supervision".

Wang Liang, the Secretary of Jiuding group, responded to the reporter of the 21st century economic report that he would "accept the punishment result of the CSRC and actively rectify it.".

According to Wang Liang, in the past three years, Jiuding group has actively implemented regulatory requirements, including strengthening internal process and system control in compliance construction, and regularly holding legal training and inspection; in terms of business strategy, the company has readjusted its direction and achieved good results.

"Since 2018, we have established the development strategy of" de financing, deleveraging and focusing on the main investment industry ". In 2019, Jiuding group sold its Hong Kong Futong insurance, and used most of the cash recovered from the sale to repay the loan, greatly reducing the asset liability ratio. At the same time, the company focused on investing in the main business and actively supported the real economy. " Wang Liang said.

According to the third quarter report of 2020, the asset liability ratio of Jiuding group (new third board company) is 32.13%, which is more than half lower than that of 70.16% at the end of 2016.

According to the public information, the actual asset liability ratio from the perspective of the headquarters of Jiuding group has been less than 20% as of December 31, 2019 based on the fair net assets.

Private placement bid farewell to the "rash era"

The change of Jiuding group in recent years is just a miniature of private placement which has grown from barbarism to regular Legion after several years.

Earlier, with the rapid development of the private equity fund industry, there are also various kinds of chaos, including public or disguised public fund-raising, complex group operation, fund pool operation, interest transmission, self financing and self financing, and even illegal acts of embezzlement, misappropriation of fund assets, illegal fund-raising and other serious violations of the interests of investors, and the industry risks gradually appear.

Since 2014, "private investment fund manager registration and fund filing measures" was officially announced and implemented, which has become the starting point of the era of private equity supervision.

In the following years, the regulatory authorities conducted a comprehensive review and thorough investigation on the private equity market. For example, on May 27, 2016, the national stock transfer system issued the notice on issues related to listing and financing of financial enterprises, which clearly stated that there was no case of private institutions subscribing shares or stocks issued by private institutions with fund shares before listing.

At the beginning of the new year of 2021, some regulations on strengthening the supervision of private investment funds (hereinafter referred to as the "Regulations") have also been officially issued. The CSRC has formed the "ten prohibitive requirements" of private fund managers and practitioners.

According to an interview with a partner of a private equity firm in Shanghai, the formal implementation of the new regulations on private placement supervision shows that the legal construction of the market is becoming mature, which is conducive to the long-term development of the capital market. "There are pains in the short term, but it is a good development opportunity for the private equity institutions with investment failure and the team continuing to be sunny according to the rhythm, which is conducive to the realization of a virtuous circle of survival of the fittest in the industry 。”

In recent years, under the benign competition, private funds break through the economic downturn and the pressure of internal and external situation, and realize the growth against the trend. By the end of 2020, 24600 managers had been registered, 96800 private funds had been registered, and the management scale was 15.97 trillion yuan.

On January 8, the local financial supervision bureau of Shenzhen issued a proposal to solicit public opinions on several measures to promote the sustained and high-quality development of equity investment in Shenzhen (Draft), which mentioned that it would explore the listing system of excellent equity investment management institutions.

Looking back on April 29, 2014, Jiuding group made its debut in the capital market, creating a precedent for domestic PE to actively enter the capital market. However, for a long time afterwards, due to the continuous improvement of regulatory policies in the private equity industry, this channel was blocked. After nearly three years, Shenzhen has proposed to study the "listing system of equity investment management companies", which may mean that the new private placement Bureau under the sunshine is just beginning.