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Original title: First instance verdict in Wuyang bond fraudulent issuance case, securities firms, accounting firms and law firms are all liable.
“Let the saboteurs pay the price of destruction, and let the pretended” guardian “not dare to pretend to sleep. This is the basic attitude of the judicial process to false statements in the stock market.” This is the recent Hangzhou Intermediate People’s Court ”) in the case of fraudulent issuance of“ Wuyang Bond ”when the judgment was announced in the first instance.
From the initial outbreak of the crisis in late 2016, to exposure to redemption risk in 2017, and subsequent investor litigation, this is the first case in the country.the companyLinkThe fraudulent issuance case finally has the latest development. According to the lower court ruling issued by the Hangzhou Intermediate Court on December 31, 2020, in the case, the main underwriter, the law firm,accountingInstitutions, rating societies and other intermediary agencies will assume joint and several liability for compensation.
The verdict movedBond marketIf the final judgment remains unchanged, then this case can become the first caseBrokerageCases of assuming joint and several liability for the subscription of bonds. In this regard, many bond market professionals called “creditThe debt market has changed “and intermediaries may no longer be able to” do their thing “in the future.
However, for the verdict, the relevant person at Debon Securities said they would appeal. Debon Securities affirmed that the judgment in the first instance of the case will have a great impact on the commercialization and legalization of the bond market. “We must not assume joint and several liability and will file an appeal within the specified time to protect our legal rights in accordance with the law.”
“Gatekeeper “was convicted of joint liability
On December 31, 2020, the sensational “Wuyang Debt” ushered in significant progress. The Hangzhou Intermediate People’s Court, together with the representative litigation, rendered a first instance judgment on a total of 24 bondholders who sued Wuyang Construction Group Co., Ltd. (hereinafter “Wuyang Construction”) and other defendants in securities misrepresentation liability disputes.
The court held that Wuyang Construction used false financial data to defraud the bond issue ratings, which constituted fraudulent issues and false statements, and should be liable for compensation for investors’ losses, in view of the fact that some plaintiffs were have dealt with the dispute between Wuyang Construction and Wuyang Construction through other rights protection procedures.Claim (isFor the debt relationship, the court has performed different procedures for different plaintiffs.
Specifically, the bond underwriters and the Daxin Accounting Office involved in the Debon Securities case were used for Wuyang Construction’s public bond issue.financial statementsIt issued the audit report but did not fulfill its obligations diligently. There was a major failure in the issuance and transaction of the bonds involved in the case, and Wuyang Construction should be held responsible.Debt commitmentJoint responsibility. This means that Debon Securities and Daxin Accounting will offset up to 740 million yuan.
Dagong International, as the credit rating agency for the bond issue, and the Jintiancheng law firm issued legal opinions on the bond issue. They were not diligent and due to certain flaws. The court decided that Dagong International was responsible for 10% of Wuyang Construction. Jintiancheng Wuyang Construction Law Firm will be responsible for 5% of joint liability. According to this, the compensation amounts of Dagong Ratings and Jintiancheng Law Firm were approximately 74 million yuan and 37 million yuan, respectively.
Furthermore, with respect to the civil liability of Chen Zhizhang, the actual controller of Wuyang Construction, the court held that Chen Zhizhang was the legal representative and the actual controller of Wuyang Construction.profitThe profit generation level and method should be known.Chen Zhizhang signed the relevant application documents for confirmation when there was a significant difference between the company’s declared profits and the actual situation, and actively promotedCorporate bondsIf you do not prove that you are not at fault, you will assume joint and several liability for compensation with Wuyang Construction.
Regarding the verdict, the Hangzhou Intermediate People’s Court stated that in this case, the issuer’s financial fraud and fraudulently obtained bond issue ratings, and the underwriters and intermediaries did not diligently perform their duties incorrectly, damaging seriously the credit of the market, disturbing the order of the market and violating the conditions of the investors. Legal rights. Those who make false information disclosures and those who fail to diligently carry out their duties will be required to pay the costs of violations of laws and regulations and compensate investors for their losses.
“From the point of view of the amount of compensation, it has a great warning effect on the intermediary agencies,” a bond market expert told a China Business News reporter. Although the Hangzhou Intermediate Court ruling has not yet entered into force, everyone is paying more attention to the second instance. But intermediary agencies will inevitably strengthen risk control management in the future, otherwise, once the thunder is stepped on, the gain will not be worth the loss. After all, the revenue per order can be much less than the penalty.
Currently, Wuyang Construction has entered a bankruptcy and reorganization stage. For intermediaries such as Debon Securities and Daxin Accounting, who must assume joint responsibilities, the pressure for compensation is greater. The CBN reporter learned that Debon Securities will appeal after the verdict is released.
Relevant people from Debon Securities affirmed that the result of the first instance judgment is contrary to the principle of “combination of responsibility and degree of fault” proposed by the Supreme People’s Court in the “Act of the Bail Litigation Trials of the National High Court “issued by the Supreme Court in July last year. The real situation does not match. The judgment in the first instance of this case will have a great impact on the commodification and legalization of the bond market. “We should not have joint and several liability, and we will file an appeal within the prescribed time limit to protect our legal rights in accordance with the law.”
The first nationally applicable representative litigation system in the securities sector
The case of the “Wuyang debt” has always attracted attention. When the trial was opened on September 4, 2020, the cumulative broadcast of the public live broadcast of the trial reached 100,000 times. This is not only because the “Wuyang Bond” is the first case of fraudulent issuance of corporate bonds in the country, but it is also the first case of securities litigation representatives.
It is understood that since 2019, bond investors have successively filed lawsuits with the Hangzhou Intermediate People’s Court, alleging that Wuyang Construction fraudulently issued “15 Wuyang bonds” and “15 Wuyang bonds” without meeting the bond issuance conditions. . 02 “TwoPublic offerBonds, requesting Wuyang Construction to repay the principal and interest on the bonds and interest due; Chen Zhizhang as the actual controller, Debon Securities, Daxin Accounting, etc., as underwriters and intermediary agencies to assume joint and miscellaneous responsibilities.
In order to make it easier for investors to claim their rights, the Hangzhou Intermediate People’s Court actively explores the representative litigation system for securities disputes, asks the public for investors to be qualified natural persons, and selects and determines litigation representatives. On March 13, 2020, the Hangzhou Intermediate People’s Court issued a series of disputes on liability for misrepresentation of securities of “15 Wuyang Bond” and “15 Wuyang 02” Bond Natural Person Investor v. Wuyang Construction Group Co., Ltd.ad“, notify investors eligible to participate in the registry. This case became the first judicial practice of ordinary representative litigation in the field of civil securities compensation litigation since the new reform of the Securities Law and its implementation on 1 March 2020.
Today, this case may become the “first case” in judgment of the liability of intermediary agencies in the field of securities disputes, which will have a significant impact on the ecology of intermediaries. The Hangzhou Intermediate Court stated that The healthy development of the capital market is based on the honest construction of market entities, and it is practical and serious to practice.Information disclosure systemIt is the foundation of a healthy and prosperous stock market.WarrantyIt is also that investors make their own business judgments and take responsibility on the basis of fully understanding the real situationTransaction riskPremise.
The court held that misrepresentations are a traditional problem in the stock market, not only directly damaging the interests of investors, but also causing great damage to the fair and open investment environment. Letting saboteurs pay the price for sabotage and preventing the feigned “guardian” from pretending to be asleep is the basic attitude of court trials to false statements in the stock market.
One professional told reporters that for underwriting agencies, the futureproductSales responsibilities may need to simultaneously strengthen duty of care.Qualified investorIn the system of simultaneous institution building, it is actually easy to provoke the weakening of the prudential obligations of investors to a great extent.
Following the first instance verdict, the plaintiffattorneyLawyer Shanghai Hanlian Law FirmcamaraderieLawyer Song Yixin said that the party or parties who lost or partially lost the case will definitely appeal to the lower court. According to the civil litigation process, the case can get an effective judgment in mid-2021. Song Yixin also suggested that creditors who have not filed a lawsuit should file a lawsuit as soon as possible, and the statute of limitations for lawsuits not controversial is only 6 months.
However, there are couponsentrepreneurShi said that compared to the rigid handling of litigation trials, choosing the acquisition and settlement method to resolve Wuyang’s debt risks or a more appropriate path can avoid undue impact on the industry. If Wuyang Bond becomes the first instance in which a securities company assumes joint responsibility for the bond underwriting, the securities firm will assume civil liability for compensation that far exceeds the liability for misrepresentations of shares.
(Source: China Business News)
(Editor in charge: DF387)
I solemnly declare: The purpose of this information is to spread more information, and it has nothing to do with this booth.
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