Core Viewpoint - The recent trend of multiple investment bankers from Industrial Securities taking high-level positions in companies they previously sponsored for IPO raises concerns about the effectiveness of internal controls and the potential for financial fraud in these companies [1][3][4]. Group 1: Issues with Investment Banking Practices - Several investment bankers from Industrial Securities have joined companies they sponsored for IPOs shortly after the listings, which raises questions about the integrity of the IPO process and the effectiveness of ongoing supervision [2][3][4]. - Notable cases include Li Weilan, who became CFO and Secretary of the Board at Foxit Software shortly after its IPO, and Wen Guoshan, who took a similar role at Alade [2][3][6][7]. - The phenomenon of investment bankers transitioning to executive roles in their sponsored companies is not common, particularly within the supervision period, highlighting potential conflicts of interest [3][8]. Group 2: Financial Performance Concerns - Companies like Foxit Software and Green通科技 experienced significant profit increases before their IPOs, followed by drastic declines in performance post-listing, raising doubts about the authenticity of their financial data [9][18][21]. - For instance, Green通科技's revenue and net profit saw substantial growth from 2019 to 2022, but both metrics dropped significantly in the years following its IPO [10][11][12]. - Foxit Software's IPO was marked by a high issuance price and significant overfunding, yet it has reported continuous losses since its second year post-IPO [18][21]. Group 3: Regulatory and Internal Control Implications - The rapid movement of investment bankers to executive roles in their sponsored companies during the supervision period poses challenges to the independence of ongoing oversight and raises concerns about potential collusion [23]. - The China Securities Regulatory Commission (CSRC) has issued warnings to Industrial Securities regarding deficiencies in their internal control processes, particularly in project initiation and quality control [23]. - The CSRC's actions indicate that the effectiveness of the internal control "three lines of defense" at Industrial Securities is under scrutiny, suggesting a need for improved governance and compliance measures [23].