China Securities Regulatory Commission issues prior notice of penalties against Tianfeng Securities and Contemporary Group over unlawful financing and disclosure breaches, proposes CNY 59.8 million in fines and lifetime market bans

The China Securities Regulatory Commission has issued a prior notice of administrative penalties and securities market bans against Tianfeng Securities Co. and Wuhan Contemporary Technology Industry Group over suspected unlawful financing and information disclosure violations. The regulator found that from 2020 to 2022 Tianfeng illegally provided financing to its former largest shareholder, Contemporary Group, and failed to disclose related-party transactions with that shareholder. Contemporary Group and Tianfeng were found to have jointly carried out the related violations. The Hubei bureau of the regulator proposes maximum fines totaling CNY 25 million for Tianfeng and Contemporary Group, and CNY 34.8 million for nine responsible individuals. It also proposes lifetime securities market bans for Contemporary Group actual controller Ai Luming, Tianfeng former chairman Yu Lei, and former vice president and chief financial officer Xu Xin. Separately, the Hubei bureau proposes administrative supervisory measures including suspension of relevant business, orders to discipline responsible personnel and supervisory talks, while the Shanghai Stock Exchange plans maximum disciplinary sanctions against Tianfeng, Contemporary Group and relevant individuals. The commission said it will continue to pursue both principal offenders and facilitators in similar cases and will press the securities industry to strengthen corporate governance and compliance and risk control management. As prior background cited in the release, Contemporary Group's Tianfeng shareholding had already been transferred to Hubei provincial enterprises, which the regulator said helped safeguard Tianfeng's operations.