Tianfeng Securities series penalties imposed: the company and related responsible persons fined a total of 41.7 million yuan, with private fund distribution suspended for 2 years

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Special Topic: 2026 International Consumer Rights Day — Market Regulation in Action

Tianfeng Securities (Rights Protection) Co., Ltd. (referred to as “Tianfeng Securities,” 601162) has received multiple penalties.

Source: Shanghai Stock Exchange website

On March 14, Tianfeng Securities announced that on March 13, the company received an “Administrative Penalty Decision” issued by the Hubei Securities Regulatory Bureau. The announcement states that, regarding Tianfeng Securities’ alleged illegal financing and information disclosure violations related to Wuhan Contemporary Technology Industry Group Co., Ltd. (referred to as “Contemporary Group”), the Hubei Securities Regulatory Bureau imposed a fine of 15 million yuan on Tianfeng Securities. Five current responsible persons of Tianfeng Securities were fined a total of 21.3 million yuan. Among them, former Chairman Yu Lei and former Vice President and CFO Xu Xin were permanently banned from the securities market.

Meanwhile, due to some employees promoting non-company-sold financial products, Tianfeng Securities was suspended from selling private equity financial products for 2 years.

In addition, due to suspected illegal disclosure of shareholding changes of Fujian Yong’an Forestry (Group) Co., Ltd. (“Yong’an Forestry”), the Hubei Securities Regulatory Bureau ordered Tianfeng Securities to correct the issue, issued a warning, and fined 4 million yuan; President Wang Linjing received a warning and a fine of 1.4 million yuan.

The Shanghai Stock Exchange also imposed disciplinary actions on Tianfeng Securities and related responsible persons.

Former Chairman, Vice President, and CFO banned for life from the market

The announcement shows that Tianfeng Securities, due to suspected violations of information disclosure and illegal financing, received a “Notice of Filing” from the China Securities Regulatory Commission on November 28, 2025, and a “Preliminary Administrative Penalty Notice” from the Hubei Securities Regulatory Bureau on February 13, 2026.

From 2020 to 2022, under the control of Contemporary Group, Tianfeng Securities used complex means such as proprietary funds, client assets, private placement products, and reverse repurchase agreements to provide over 9 billion yuan in financing to shareholders and related parties. These related-party transactions were not disclosed, leading to significant omissions in the 2020-2022 annual reports.

Regarding the penalties, the announcement states: 1. Warning and a fine of 15 million yuan to Tianfeng Securities; 2. Warning and a fine of 6 million yuan to former Chairman Yu Lei; 3. Warning and a fine of 6 million yuan to former Vice President and CFO Xu Xin; 4. Warning and a fine of 3.3 million yuan to former Vice President Zhai Chenxi; 5. Warning and a fine of 3 million yuan to Director and President Wang Linjing; 6. Warning and a fine of 3 million yuan to former Executive Vice President Feng Lin.

Meanwhile, due to the serious misconduct of Yu Lei and Xu Xin, the Hubei Securities Regulatory Bureau decided to impose lifetime market bans on them.

The Shanghai Stock Exchange also publicly reprimanded Tianfeng Securities and the individuals: former Chairman Yu Lei, President Wang Linjing, Vice President and Executive Vice President Zhai Chenxi, Executive Vice President Feng Lin, and Vice President and CFO Xu Xin; officially determining that Yu Lei and Xu Xin are permanently unfit to serve as directors, supervisors, or senior managers of securities issuers. Other responsible entities will be handled separately according to regulations. Issues involved include providing financing to shareholders or related parties, and failure to disclose information as required, resulting in major omissions in annual reports.

Suspension of private equity product sales for 2 years; Tianfeng Tianrui suspended from new product creation for 1 year

The announcement shows that on March 13, Tianfeng Securities also received a decision from the Hubei Securities Regulatory Bureau to suspend related business, discipline involved personnel, and conduct regulatory interviews, as well as a decision to suspend Tianfeng Tianrui Investment Co., Ltd. from related business and issue a warning letter.

The Hubei Securities Regulatory Bureau pointed out that, upon investigation, Tianfeng Securities has four main issues: 1. Some employees promoted non-company-sold financial products; 2. The company illegally collaborated with Wuhan Contemporary Tianxin Wealth Investment Management Co., Ltd.; 3. The company illegally sold the Fusheng Anxin Stable No. 1 fixed income private investment fund; 4. The company’s operational decisions were not prudent, with poor control over subsidiaries and branches, and ineffective risk management.

Further, the bureau noted problems such as inaccurate 2022 performance forecasts, irregular research report production and release, non-standard practices in investment banking projects, inadequate organizational restructuring of private fund business, personnel management and filing issues, and violations related to property company business scope commitments. These issues reflect deficiencies in management, internal control, and compliance.

Therefore, the bureau decided: Tianfeng Securities will suspend private equity product sales for 2 years from the date of this decision.

The announcement also states that Tianfeng Tianrui Investment Co., Ltd. (“Tianfeng Tianrui”) has issues such as operating beyond its scope, irregular management of some private fund products, and non-market-based issuance of private debt.

The bureau decided to suspend Tianfeng Tianrui from creating new private fund products for 1 year and issued a warning letter. Tianfeng Tianrui is not allowed to establish new private fund products within 1 year from the date of this decision.

According to Tianfeng Securities’ 2025 semi-annual report, Tianfeng Tianrui is a wholly owned subsidiary of Tianfeng Securities, mainly engaged in managing or entrusted management of equity investments and related consulting services.

As of June 2025, Tianfeng Tianrui and its subsidiaries managed 22 funds, with a committed scale of 4.091 billion yuan and a paid-in scale of 2.992 billion yuan. In the first half of 2025, Tianfeng Tianrui reported a net loss of 71.7799 million yuan, operating loss of 66.8139 million yuan, operating income of -50.7407 million yuan, total assets of 12.114 billion yuan, and net assets of 1.42 billion yuan.

Warning and fine of 4 million yuan from Fujian Securities Regulatory Bureau

On March 13, Tianfeng Securities also received a decision from the Fujian Securities Regulatory Bureau regarding administrative penalties.

The bureau pointed out that on December 31, 2021, the Quanzhou Intermediate People’s Court of Fujian Province issued an “Execution Ruling,” ordering the defendant Su Mouxu and Fujian Nan’an Xiongguan Investment Center (Limited Partnership) to transfer 41.37 million shares of Yong’an Forestry and dividends to Tianfeng Securities to settle related debts, stating that “the above property rights transfer shall take effect from the date of service of this ruling.” On that day, Tianfeng Securities, as the applicant, received the ruling, holding 12.29% of Yong’an Forestry’s total shares.

According to regulations, Tianfeng Securities should have disclosed this shareholding change promptly, but it only sent a “Notification Letter” on February 23, 2022, and a “Brief Report on Equity Changes” on March 7, 2022, to Yong’an Forestry. Yong’an Forestry disclosed the relevant information on February 24, 2022, and March 9, 2022.

The bureau stated that Tianfeng Securities’ failure to disclose the shareholding change in a timely manner was illegal.

Therefore, the bureau decided: to order Tianfeng Securities to correct the issue, issue a warning, and impose a fine of 4 million yuan.

Further, the bureau pointed out that Wang Linjing, as Tianfeng Securities’ President, who was aware of the “Execution Ruling” on December 31, 2021, but did not organize timely disclosure of Yong’an Forestry’s shareholding change, was directly responsible for the failure to disclose.

The bureau decided: to warn Wang Linjing and fine her 1.4 million yuan.

2025 expected to turn losses into profits

On February 13, the China Securities Regulatory Commission published an article titled “CSRC Strictly Investigates Tianfeng Securities’ Illegal Activities,” stating that from 2020 to 2022, Tianfeng Securities illegally provided financing to the former largest shareholder, Contemporary Group, and failed to disclose related-party transactions as required. The group and Tianfeng Securities jointly engaged in illegal activities, severely violating securities laws and regulations.

The CSRC emphasized that corporate governance is the foundation of high-quality listed company development, and compliance risk control is vital for steady growth. The violations by Tianfeng Securities show that, on one hand, major shareholders abuse their rights, illegally use securities firms for financing, and erode securities firms’ interests; on the other hand, securities firms breach compliance bottom lines and cooperate with illegal shareholder activities, which is severe and must be punished strictly according to law.

A month later, the penalties were finalized, and Tianfeng Securities received a fine of over 10 million yuan.

Sources close to Tianfeng Securities said that the penalties are consistent with the previous “Notice of Administrative Penalty,” marking the completion of relevant regulatory procedures and a comprehensive cleanup of historical issues caused during the private shareholder era. With the formal issuance of the administrative penalty decision, all related regulatory procedures are concluded, effectively severing past risks.

Official data shows that Tianfeng Securities is a provincial financial institution controlled by Hubei Hongtai Group, the only financial service enterprise directly under Hubei Province. Founded in 2000, headquartered in Wuhan, Hubei, it was listed on the Shanghai Stock Exchange on October 19, 2018, as the first financial institution in Hubei to go public via IPO.

Tianfeng Securities has total assets close to 100 billion yuan, a registered capital of 10.074 billion yuan, 29 branch offices, 77 business departments, and multiple wholly owned or controlling subsidiaries, with over 2,700 employees.

In terms of equity, Tianfeng Securities’ 2025 Q3 report shows that, as of the end of the reporting period, the shareholders holding more than 5% are Hubei Hongtai Group Co., Ltd. (28.14%) and Wuhan State-owned Capital Investment Operation Group Co., Ltd. (7.50%).

Regarding performance, Tianfeng Securities previously announced that, based on preliminary calculations by the finance department, it is expected to achieve a net profit attributable to the parent of 125 million to 185 million yuan in 2025, turning from loss to profit; the net profit after deducting non-recurring gains and losses is expected to be 138 million to 198 million yuan.

According to Dazhihui VIP, as of the close on March 13, Tianfeng Securities closed at 3.96 yuan per share, down 1.25%.