Core 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].

Core Viewpoint - The company Sierte has been implicated in a criminal case involving former executives and a securities representative, highlighting issues of embezzlement and bribery within the financing projects [1][2]. Group 1: Legal Issues - Sierte received a notice from the Xuancheng Public Security Bureau regarding the transfer of a case involving former executives and securities representative Sun Bin for embezzlement and bribery [1]. - The notice indicates that the evidence against the suspects, including Sun Bin, is deemed sufficient for prosecution [1]. - The case involves multiple charges, including embezzlement, bribery, fraud, and issuing false VAT invoices [1]. Group 2: Financing History - Since its listing in 2011, Sierte has conducted four refinancing activities between 2014 and 2019, all sponsored by Guoyuan Securities [2]. - Key financing projects include a directed issuance raising 1.07 billion yuan in September 2015 and an 800 million yuan convertible bond issuance in 2019, both involving Sun Bin as the sponsor [2]. Group 3: Regulatory Environment - The Chinese Securities Association revised the "Sponsorship Business Rules" in 2024, introducing a classification system that can suspend sponsors from business activities, impacting their career [3]. - The new rules enforce lifelong responsibility for the authenticity and completeness of project application materials, compelling sponsors to maintain diligence throughout the project lifecycle [3]. - Increased regulatory scrutiny aims to enhance the quality control of securities firms and ensure that they fulfill their role as gatekeepers in the capital market [3].

Core Viewpoint - The recent update from the China Securities Association (CSA) has added eight new individuals to the D-class (suspended business) list of sponsor representatives, bringing the total to 15, reflecting the regulatory body's strict oversight of the underwriting industry [1][6]. Group 1: D-Class Sponsor Representatives - The newly added eight D-class sponsor representatives come from six brokerage firms, including Shenwan Hongyuan, Guoyuan Securities, Caixin Securities, GF Securities, Dongwu Securities, and China International Capital Corporation [1]. - The specific cases leading to the addition of these representatives include disciplinary actions related to various IPO and private placement projects, highlighting the consequences of inadequate due diligence [5][6]. Group 2: Regulatory Environment - The D-class list is part of a dynamic updating mechanism established by the CSA to enhance the negative evaluation public disclosure system, which now includes four categories: A (comprehensive practice information), B (institution verification), C (punishment information), and D (suspended business) [6]. - The CSA has reported a reduction of 168 individuals in the A-class sponsor representatives since last September, indicating a tightening of standards and increased scrutiny on compliance within the industry [6]. Group 3: Industry Response - Affected brokerage firms have expressed their commitment to accept penalties sincerely, reflect deeply, and enhance internal management to improve the quality of their investment banking services [7]. - The regulatory actions underscore the importance of intermediary institutions in maintaining the integrity of the capital market, with the China Securities Regulatory Commission (CSRC) intensifying its efforts to hold these entities accountable for their professional conduct [6][7].