Fine of 15 million yuan! Tianfeng Securities penalty officially issued, company's latest response!

Log in to Sina Finance App and search for [Information Disclosure] to see more evaluation levels

（Source: Quan Yan She）

On March 13, Tianfeng Securities announced that due to suspected violations of information disclosure laws and providing illegal financing to shareholders, the company received an Administrative Penalty Decision from the Hubei Securities Regulatory Bureau. The penalty is consistent with the “Notice of Administrative Penalty Prior Notification” disclosed a month earlier, marking the full completion of the regulatory process. On the same day, Tianfeng Securities also received another Administrative Penalty Decision from the Fujian Securities Regulatory Bureau regarding its violation of information disclosure related to Yong’an Forestry’s shareholding changes.

According to the penalty decision, Tianfeng Securities was issued a warning and fined a total of 15 million yuan. Several senior executives, including then Chairman Yu Lei and then Vice President and CFO Xu Xin, were warned and fined for related illegal activities, with Yu Lei and Xu Xin being subject to lifelong securities market bans.

In response to the above penalties, Tianfeng Securities stated that this punishment is a comprehensive cleanup of historical issues left over from the era of private shareholders. The company sincerely accepts and resolutely implements it, emphasizing that this marks the complete resolution of historical risks and the solid implementation of rectification work. Currently, the company’s operations are stable and orderly, having shed unnecessary burdens and entered a new stage of steady development.

Finalization of the Penalty

As early as February this year, the China Securities Regulatory Commission (CSRC) disclosed on its official website that it planned to impose administrative penalties and market bans on Tianfeng Securities for illegal financing and information disclosure violations related to Wuhan Contemporary Group.

Investigation found that from 2020 to 2022, Tianfeng Securities illegally provided financing to the former largest shareholder, Contemporary Group, and failed to disclose related-party transactions with Contemporary Group as required. Contemporary Group and Tianfeng Securities jointly engaged in related illegal activities, severely violating securities laws and regulations.

On March 13, Tianfeng Securities officially received the Administrative Penalty Decision. According to the decision, the company was warned and fined 15 million yuan. Several senior executives, including then Chairman Yu Lei and then Vice President and CFO Xu Xin, were warned and fined for related violations. As directly responsible personnel, Yu Lei and Xu Xin were also subjected to lifelong securities market bans.

Meanwhile, due to issues such as illegal sales of private equity funds, Tianfeng Securities also received an administrative regulatory measure decision from the Hubei Securities Regulatory Bureau. The bureau decided to suspend the company’s agency sales of private equity financial products for two years and ordered internal disciplinary actions for responsible personnel.

Additionally, due to violations in information disclosure related to Yong’an Forestry’s shareholding changes, Tianfeng Securities received an administrative penalty decision from the Fujian Securities Regulatory Bureau on the same day, being ordered to correct, warned, and fined 4 million yuan. Company President Wang Linjing was also given a warning and fined 1.4 million yuan.

Market analysts believe that this incident is a key milestone in Tianfeng Securities’ risk cleanup and has industry-wide exemplary significance. Regulatory authorities have lawfully imposed penalties, clearly conveying the regulatory direction of “pursuing the first wrongdoers and punishing accomplices,” demonstrating a firm commitment to strengthening supervision of securities institutions and cracking down on illegal activities. It further reinforces the industry’s compliance and operational standards. Relying on state-owned control to achieve governance restructuring and risk clearance, Tianfeng Securities provides a practical reference for similar institutions to resolve historical burdens and improve governance systems. It is expected to promote the industry’s transition from passive rectification to proactive compliance, from scale expansion to quality improvement.

Company Response: Sincerely Accepts

Regarding the series of penalties, Tianfeng Securities responded promptly.

The company stated that it sincerely accepts regulatory penalties and will resolutely implement all decisions. This marks the complete resolution of historical risks and the thorough implementation of rectification work. Currently, operations are stable and orderly, and the company has entered a new stage of steady development.

Tianfeng Securities further explained that since the state-owned assets took control, the company has centered on governance restructuring, systematically rebuilding its compliance and risk control systems: strengthening the Party Committee’s preliminary research procedures, improving the “Three Major and One Large” decision-making mechanism; establishing a comprehensive compliance review system across all business lines, enhancing transparent management of subsidiaries; and strengthening compliance culture, solidifying responsibilities for all staff, and building a risk defense from systems, processes, and culture. To date, all rectification work has been completed on schedule and has shown effective results, significantly improving the company’s compliance operation level.

In terms of performance, Tianfeng Securities expects to achieve a net profit attributable to the parent of 125 million to 185 million yuan in 2025, successfully turning losses into profits. In the same year, the company completed a 4 billion yuan private placement, significantly strengthening its capital strength.

Looking ahead, Tianfeng Securities stated it will take the successful resolution of this historical risk as a new starting point, adhere to the core principles of compliance and steady development, continuously improve corporate governance, compliance risk control, and professional service levels. Meanwhile, the company will focus on its main business, actively integrate into the construction of Hubei’s financial hub, accelerate building a financial support for high-quality development in Hubei, and contribute to Hubei’s strategic rise in central China.