Tianfeng Securities Receives Multiple Penalties, Company and Responsible Persons Fined a Combined 40 Million Yuan, Former Chairman Banned from Market for Life

After the market close on March 13, Tianfeng Securities (601162.SH) received multiple disciplinary notices. According to the announcement, Tianfeng Securities received several administrative penalty decisions, regulatory measures, and disciplinary sanctions from the Hubei Securities Regulatory Bureau, Fujian Securities Regulatory Bureau, and the Shanghai Stock Exchange on that day, with total fines exceeding 40 million yuan.

The Hubei Securities Regulatory Bureau found that between 2020 and 2022, Tianfeng Securities illegally provided financing and engaged in information disclosure violations for the former largest shareholder, Wuhan Contemporary Technology Industry Group Co., Ltd. (referred to as “Contemporary Group”). The bureau fined Tianfeng Securities 15 million yuan, and five responsible individuals were fined a total of over 20 million yuan. Former Chairman Yu Lei and former Vice President Xu Xin were permanently banned from the market.

The investigation revealed that Tianfeng Securities provided financing to Contemporary Group using its own funds. From 2020 to 2022, at the request of Contemporary Group, the company transferred funds through subsidiaries, designated investment rescue projects, purchased bonds of Contemporary Group through private equity funds, and engaged in reverse repurchase operations in its proprietary trading department, totaling 5.502 billion yuan in financing for Contemporary Group.

Of this, Tianfeng Securities has recovered 5.253 billion yuan, and the remaining 249 million yuan has been claimed through the bankruptcy administrator or the court overseeing Contemporary Group.

Tianfeng Securities also provided 1.012 billion yuan in financing using client assets under management, by purchasing bonds of Contemporary Group in the primary market and conducting reverse repurchase agreements with two private equity funds, providing 492 million yuan and 1.52 billion yuan respectively.

Additionally, the Hubei Securities Regulatory Bureau found that some employees promoted non-company-distributed financial products, leading to a two-year suspension of its private fund distribution business. Tianfeng Tianrui Investment Co., Ltd., a subsidiary, was also suspended from establishing new private funds for one year due to operating outside its scope, irregular management of some private fund products, and non-market-based issuance of private bonds.

On March 13, Tianfeng Securities was also penalized by the Fujian Securities Regulatory Bureau for failing to disclose changes in holdings of Yongan Forest (000663.SZ) in a timely manner, with a fine of 4 million yuan. The company’s then President Wang Linjing was fined 1.4 million yuan.

According to the Shanghai Stock Exchange penalty decision, the SSE publicly reprimanded Tianfeng Securities and five responsible persons, including Yu Lei, Wang Linjing, and Xu Xin. It also publicly determined that Yu Lei and Xu Xin are permanently unfit to serve as directors, supervisors, or senior managers of securities issuers.

Regarding these penalties, Tianfeng Securities stated that the company sincerely accepts regulatory sanctions and will resolutely implement all decisions. This marks the thorough resolution of historical risks, with comprehensive rectification work firmly in place. Currently, operations are stable and orderly, and the company has entered a new stage of steady development.

In terms of performance, Tianfeng Securities expects to achieve a net profit attributable to the parent of between 125 million and 185 million yuan in 2025, turning losses into profits.

Editor: Tao Yueyang, Xiao Ziqi. Compiled from Securities Times, First Financial, 21st Century Business Herald, and others.