Everbright and Guosen Reprimanded for Lapses in IPO DisclosuresBloomberg News
Everbright Securities Co. Ltd. and Guosen Securities Co. Ltd. have been reprimanded for not providing adequate information on companies whose initial offerings they advised on, according to China’s securities regulator.
Everbright failed to disclose a drop in operating profit at Shanghai Kangda New Materials Co. Ltd., while Guosen did not inform it that Xi’an Longi Silicon Materials Co. Ltd.’s net income plunged, according to notices posted on the China Securities Regulatory Commission’s website today.
Recent fraud cases have prompted regulators to toughen rules on IPO advisers, asking underwriters last month to inspect clients’ financial statements and vowing legal action against issuers and brokers if misconduct is found. Citic Securities Co., China’s largest brokerage, was reprimanded on Jan. 8 for its lapse while advising SooChow Securities Co.’s initial offering.
Two representatives each from Guosen and Everbright have been suspended from conducting underwriting business for between three to twelve months for their roles in the cases, the official Xinhua News Agency said in a separate report.
— With assistance by Daryl Loo