Exclusively | involving the misrepresentation case of LeTV, a number of well-known intermediaries such as Zhongde Securities and ShineWing zhonghe were rumored to be suspended from receiving materials, and the accounting firm responded

21st Century Business Herald Li Yu reported in Shenzhen

Due to the case involving LeTV, Jia Yueting and other securities misrepresentation cases, many well-known intermediaries such as Zhongde Securities, Zhongtai Securities, Leanda, Huapu Tianjian, ShineWing and so on were sued by investors and stood in the defendant's seat.

On January 18, a "warm reminder" circulated in the industry.

According to the "Warm Tips" information, the CSRC will not accept the new declaration materials of Yongzhonghe and King & Wood Mallesons from January 18. At present, the intermediaries who do not receive new materials from the CSRC are: Zhongde Securities, Hualong Securities, ZTE Cai Guanghua, Kaiyuan Asset Appraisal, ShineWing, and King & Wood Mallesons.

In this regard, ShineWing released an internal email and responded: "At present, there are rumors in the market that we will not accept the materials declared by the firm, because we have received a case investigation by the CSRC on the audit of our LeTV 2015 and 2016 annual reports, according to the provisions of the CSRC, IPO, refinancing and other related administrative licensing business should not be suspended, and after communicating with the issuance department of the CSRC, they have not issued a notice to suspend the acceptance of ShineWing's IPO and refinancing." ”

ShineWing neutralizes responses

On January 18, ShineWing received a notice of investigation from the CSRC for suspected violations of laws and regulations in the annual report audit business.

ShineWing said that the annual report audit described in the case investigation should be the audit of the 2015 and 2016 annual reports of LeTV Information Technology (Beijing) Co., Ltd. (hereinafter referred to as LeTV).

Previously, the CSRC issued the "Decision on Administrative Penalties of the China Securities Regulatory Commission (15 Responsible Entities such as LeTV and Jia Yueting)".

According to the Administrative Penalty Decision of the China Securities Regulatory Commission, LeTV's non-public issuance of shares in 2016 constituted a fraudulent issuance. On September 23, 2015, LeTV's application for non-public issuance of shares was reviewed by the Issuance Review Committee of the China Securities Regulatory Commission and unconditionally approved. On May 19, 2016, the China Securities Regulatory Commission issued the "Reply on Approving the Non-public Issuance of Shares of LeTV Information Technology (Beijing) Co., Ltd.", and on May 25, 2016, LeTV held the 21st meeting of the third board of directors to consider and pass the proposal to extend the validity period of the resolution of the non-public shareholders' meeting of LeTV.

On August 8, 2016, LeTV was listed in a non-public offering, and LeTV issued 106.643 million new shares in this non-public offering, raising 4.799 billion yuan, and the three-year financial data period disclosed by the declaration was from 2012 to 2014 and from January to June 2015.

In this regard, ShineWing believes that the corresponding financial reports issued by the audit have not been used for the purpose of LeTV's IPO and refinancing approvals.

According to the provisions of Article 15, Paragraphs 3, 4, and 22, Paragraphs 3, and 4 of the Decision on Amending the Provisions on the Implementation Procedures for Administrative Licensing of the China Securities Regulatory Commission issued by the Csrc in 2018, and the Opinions on the Application of the Relevant Provisions of Articles 15 and 22 of the Provisions on the Implementation Procedures for Administrative Licensing of the China Securities Regulatory Commission - Opinions on the Application of Securities and Futures Law No. 13, the financial audit of the annual report filed this time is an act of providing services in non-administrative licensing matters. It is not within the scope of the CSRC's decision not to accept the application.

Defendant ShineWing Neutralization

ShineWing Certified Public Accountants (Special General Partnership) has been established for more than 30 years and is one of the top eight accounting firms in China.

At present, ShineWing has four parallel business segments of audit assurance, management consulting, tax and accounting services, and engineering management consulting, with 80 offices in Chinese mainland and 15 other countries, with a total of more than 10,000 employees, including more than 480 partners.

On January 17, Shanxi Securities announced that its holding subsidiary, Zhongde Securities, had recently received a civil complaint from the Beijing Financial Court, in which 2,000 plaintiffs, including Shanghai Junying Asset Management Partnership (Limited Partnership), filed a civil lawsuit against 21 defendants, including LeTV, demanding that LeTV compensate for the total investment losses caused by its misrepresentation of 4.571 billion yuan, and requiring the other 20 defendants to bear joint and several liability for compensation.

LeTV investors believe that LeTV's misrepresentation has caused damage to its rights and interests, and requires LeTV to bear civil compensation liability for false statement infringement, and Jia Yueting and 14 other natural persons bear joint and several liability for compensation as the person responsible for the fault of false statement.

In addition, 3 securities companies and 3 accounting firms, including Zhongde Securities, were jointly and severally liable for failure to exercise due diligence and failed to discover leTV's financial fraud.

The three accounting firms involved are Leanda Certified Public Accountants (Special General Partnership), Huapu Tianjian Certified Public Accountants (Beijing) Limited and ShineWing Certified Public Accountants (Special General Partnership).

According to public information, on May 7, 2021, the Beijing Financial Court accepted a case in which Wang Jing and 11 other plaintiffs jointly sued the defendants LeTV, Jia Yueting and 21 other defendants for securities misrepresentation liability disputes, and the plaintiffs Wang Jing and Liu Guoliang were jointly elected as the proposed representatives by 11 plaintiffs, and at the same time requested to represent other investors with the same kind of litigation claims and applied to join the litigation in this case, and filed an ordinary representative lawsuit.

After preliminary review, the Beijing Financial Court decided to apply the ordinary representative litigation procedure to try the case, and on July 30, 2021, it issued the (2021) Jing 74 Min Chu No. 111 Civil Ruling to determine the scope of the right holders in this case.

On September 30, 2021, the Beijing Financial Court issued an announcement on the registration of the litigation rights of representatives in the securities misrepresentation liability dispute cases such as LeTV.com and Jia Yueting.

It is reported that the case is the first ordinary representative litigation case of securities dispute accepted by the Beijing Financial Court, and Huang Jiangdong, a senior consultant of Grandall Lawyers (Shanghai) Law Firm who has worked in the securities regulatory system for many years and has been a doctor of law, said: "The judgment supports the possibility of investors receiving compensation. ”

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