In This Article:
China's market regulator has fined China International Capital Corporation (CICC), considered China's Goldman Sachs, 6 million yuan (US$841,000) over its failure to perform due diligence as sponsor of local chip company S2C's failed new share listing in 2021, according to the investment bank's filing with the Hong Kong stock exchange.
The China Securities Regulatory Commission (CSRC) also confiscated 2 million yuan from the company's sponsorship business income, and issued warnings and fines of 1.5 million yuan each to CICC executives Zhao Shanjun and Chen Liren, the sponsor representatives of the initial public offering (IPO).
CICC's "failure to exercise due diligence" in its sponsorship of S2C's IPO on the science and technology innovation board, along with "misrepresentations" in the issuance sponsorship letter and other documents it issued, violates the Securities Law of the People's Republic of China and constitutes an illegal act, the CICC disclosure said.
Do you have questions about the biggest topics and trends from around the world? Get the answers with SCMP Knowledge, our new platform of curated content with explainers, FAQs, analyses and infographics brought to you by our award-winning team.
CICC said it "sincerely accepts the penalties and will learn lessons from this case for comprehensive rectification". The company received notice of the CSRC's case filing earlier this month.
"The company is committed to an investor-oriented approach, continuously enhancing the control of professional quality, rigorously safeguarding the 'entrance' to the capital market, fulfilling its responsibility as a 'gatekeeper', and better serving the high-quality development of the capital market," it added.
CICC said its operations remain normal.
S2C, which focuses on tools used to design integrated circuits, applied for an IPO on Shanghai's Nasdaq-style Star market in August 2021. The application was withdrawn in July 2022 after the CSRC led a probe into the company and found that it may have falsified financial results.
S2C inflated its profits for 2020 by 12.5 million yuan, or 118.5 per cent, the Shanghai Stock Exchange said in June.
This article originally appeared in the South China Morning Post (SCMP), the most authoritative voice reporting on China and Asia for more than a century. For more SCMP stories, please explore the SCMP app or visit the SCMP's Facebook and Twitter pages. Copyright © 2024 South China Morning Post Publishers Ltd. All rights reserved.
Copyright (c) 2024. South China Morning Post Publishers Ltd. All rights reserved.