Share on facebook
Share on twitter
Share on telegram
Share on whatsapp
Share on linkedin
Share on print
Share on email

Risk Watch: Securities Regulator Sets up Supervision Committee

◎ Anti-corruption investigators have targeted members of the Issuance Examination Committee, the most powerful department in the CSRC, in recent years. 


During a meeting of the China Securities Regulatory Commission’s (CSRC) Issuance Examination Committee, CSRC chief Liu Shiyu announced that a new Issuance Supervision Commission would operate in parallel with the Issuance Examination Committee to strengthen financial oversight.

Why it matters: Under the current issuance system, members of the Issuance Examination Committee have the power to authenticate companies before they are listed on the market, but they won’t be held accountable for mistakes. In the worst case scenario, Issuance Examination Committee members who blunder have only been made to leave the Committee. Several cases of listing fraud have emerged in recent years.

One notable case of potential listing fraud involves the IPO of Chinese conglomerate LeEco’s technology company. Three or four of the Issuance Examination Committee members who undertook the Le.com IPO were investigated between July and August, according to mainland media reports.

The backdrop: Anti-corruption investigators have targeted members of the Issuance Examination Committee, the most powerful department in the CSRC, in recent years.

On Aug. 30, 2015, CSRC first rank deputy director Yao Gang, an Issuance Examination Committee member who was known as “Issuance Emperor,” was purged. Yao’s downfall came after the arrest of his former secretary Liu Shufan and former subordinate Li Liang. Liu reportedly made 3 million yuan (about $454,000) per illicit deal, while Li Liang made 7 million yuan.

This April, former Issuance Examination Committee member Feng Xiaoshu was arrested for profiting off his authentication of Pre-IPO Capital Partners Ltd. Feng invested 3 million yuan in Pre-IPO before it was listed and dumped the shares after the listing, a move that earned him 248 million yuan.

Our take: We earlier reported that Xi Jinping would focus his efforts on cleaning up corruption in the financial sector after the 19th Party Congress. Xi has already made several moves during the past month since the Congress:

"I’m a very happy, satisfied subscriber to your service and all the deep information it provides to increase our understanding. SinoInsider is profoundly helping to alter the public landscape when it comes to the PRC."
James Newman, Former U.S. Navy cryptologist
“Prof. Ming’s information about the Sino-U.S. trade war is invaluable for us in Taiwan’s technology industry. Our company basically acted on Prof. Ming’s predictions and enlarged our scale and enriched our product lines. That allowed us to deal capably with larger orders from China in 2019. ”
Mr. Chiu, Realtek R&D Center
“I am following China’s growing involvement in the Middle East, seeking to gain a better understanding of China itself and the impact of domestic constraints on its foreign policy. I have found SinoInsider quite helpful in expanding my knowledge and enriching my understanding of the issues at stake.”
Ehud Yaari, Lafer International Fellow, The Washington Institute
“SinoInsider’s research on the CCP examines every detail in great depth and is a very valuable reference. Foreign researchers will find SinoInsider’s research helpful in understanding what is really going on with the CCP and China. ”
Baterdene, Researcher, The National Institute for Security Studies (Mongolian)
“The forecasts of Prof. Chu-cheng Ming and the SinoInsider team are an invaluable resource in guiding our news reporting direction and anticipating the next moves of the Chinese and Hong Kong governments.”
Chan Miu-ling, Radio Television Hong Kong China Team Deputy Leader
“SinoInsider always publishes interesting and provocative work on Chinese elite politics. It is very worthwhile to follow the work of SinoInsider to get their take on factional struggles in particular.”
Lee Jones, Reader in International Politics, Queen Mary University of London
“[SinoInsider has] been very useful in my class on American foreign policy because it contradicts the widely accepted argument that the U.S. should work cooperatively with China. And the whole point of the course is to expose students to conflicting approaches to contemporary major problems.”
Roy Licklider, Adjunct Professor of Political Science, Columbia University
“As a China-based journalist, SinoInsider is to me a very reliable source of information to understand deeply how the CCP works and learn more about the factional struggle and challenges that Xi Jinping may face. ”
Sebastien Ricci, AFP correspondent for China & Mongolia
“SinoInsider offers an interesting perspective on the Sino-U.S. trade war and North Korea. Their predictions are often accurate, which is definitely very helpful.”
Sebastien Ricci, AFP correspondent for China & Mongolia
“I have found SinoInsider to provide much greater depth and breadth of coverage with regard to developments in China. The subtlety of the descriptions of China's policy/political processes is absent from traditional media channels.”
John Lipsky, Peter G. Peterson Distinguished Scholar, Kissinger Center for Global Affairs
“My teaching at Cambridge and policy analysis for the UK audience have been informed by insights from your analyzes. ”
Dr Kun-Chin Lin, University Lecturer in Politics,
Deputy Director of the Centre for Geopolitics, Cambridge University
" SinoInsider's in-depth and nuanced analysis of Party dynamics is an excellent template to train future Sinologists with a clear understanding that what happens in the Party matters."
Stephen Nagy, Senior Associate Professor, International Christian University
“ I find Sinoinsider particularly helpful in instructing students about the complexities of Chinese politics and what elite competition means for the future of the US-China relationship.”
Howard Sanborn, Professor, Virginia Military Institute
“SinoInsider has been one of my most useful (and enjoyable) resources”
James Newman, Former U.S. Navy cryptologist
“Professor Ming and his team’s analyses of current affairs are very far-sighted and directionally accurate. In the present media environment where it is harder to distinguish between real and fake information, SinoInsider’s professional perspectives are much needed to make sense of a perilous and unpredictable world. ”
Liu Cheng-chuan, Professor Emeritus, National Chiayi University
Previous
Next