GUOYUAN SECURITIES(SZ:000728) Guan Cha Zhe Wang·2025-10-20 03:36Core Viewpoint - The recent legal case involving Sichuan Sierte Fertilizer Co., Ltd. (司尔特) has revealed significant internal corruption, implicating several former executives and a representative from Guoyuan Securities, marking a potential first for a sponsor representative being sent for prosecution in 2025 [1][4]. Group 1: Case Details - Sichuan Sierte announced that it received a notice from the Xuancheng Public Security Bureau regarding the transfer of a case involving former executives and intermediary personnel for prosecution [1][4]. - The case includes allegations of embezzlement and bribery against former chairman Jin Guoqing and former general manager Jin Zhenghui, as well as Guoyuan Securities' representative Sun Bin [4]. - The main allegations involve the misuse of positions to embezzle large sums from the company and its subsidiary, fictitious transactions to misappropriate funds, and acceptance of fraudulent invoices [4][5]. Group 2: Company Response and Internal Investigation - The investigation began in late 2023 when internal audits revealed irregularities in the accounts of the subsidiary Guizhou Lufa, leading to a police report filed by Sichuan Sierte in January 2024 [4][5]. - The company’s actual controller, Yuan Qihong, has been actively involved in addressing the situation and has communicated the need for comprehensive legal measures to recover losses caused by the internal criminal group [5][7]. Group 3: Guoyuan Securities' Involvement - Sun Bin, the implicated representative from Guoyuan Securities, had previously served as a sponsor for two key financing projects for Sichuan Sierte, including a 2015 private placement raising 1.07 billion yuan and an 800 million yuan convertible bond issuance in 2019 [4][8]. - Guoyuan Securities has faced challenges in its investment banking business, with a significant decline in revenue from 9.44 billion yuan in 2021 to just 1.63 billion yuan in 2024 [10][11]. Group 4: Regulatory Environment - The regulatory landscape for sponsor representatives has tightened, with new rules implemented in September 2024 that increase accountability and oversight, aiming to prevent misconduct within the industry [12][13]. - Guoyuan Securities has been under scrutiny, receiving multiple fines for violations related to its investment banking operations, indicating ongoing issues within the firm [12].