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Shin Kong Gold’s subsidiary (2888-TW), Shin Kong Man’s investment shares, was seriously affected in internal control and the Financial Regulatory Commission imposed a hefty fine of 27.6 million yuan. New Life Chairman Wu Dongjin was suspended until the end of the current board of directors; at the same time, New Life’s foreign shares were restricted. Invest with ETFs.
In response to the lack of internal control over New Life Investment shares today (15), FSC issued a rare 9-page press release, eloquently stating the six main deficiencies of New’s investment decision-making. Life, and also required Wu Dongjin to step down from the current board of directors and stay out of the corporate governance decision-making circle until 2023. The term of the board of directors expired in June 2008, and Yuan Honglong, the director investment manager in charge of negotiating, he was removed from office and not allowed to be assigned to investment-related positions.
The FSC Insurance Office noted that the “Asset and Liability Management Committee” established by New Life led New Life’s investment decision-making. However, half of the 16 decision-making members of the decision-making committee were appointed by the chairman of the board. Investment decision-making ignores warnings and suggestions from the risk control department, has powers over the investment review committee, and avoids board oversight.
The Director of the Insurance Bureau, Shi Qionghua, said that the capital adequacy rate of the 109 results of the strategic asset allocation test of the 109-year strategic asset allocation test showed that the capital adequacy rate is less than the board’s appetite RBC (capital adequacy rate) 250%. The probability is 83.3%, but there is no relevant discussion. According to the company’s asset allocation in the first week of January this year, its foreign stocks increased by RMB 96.66 billion for two consecutive days, obviously neglecting the importance of risk control.
Shi Qionghua further noted that the investment risk control department’s market risk index has exceeded the warnings and recommendations, but the capital committee has no adjustment instructions yet, and the above decision has yet to be approved, which results in an increase in the market risk index after the end of March this year. At 43.33%, 2.75 times higher than the 15.73% approved by the board of directors. The self-assessed equity ratio is 2.2%, which puts the company at risk of not meeting legal capital adequacy standards.
In addition, Xinshou lacks prudence in the investment decision-making process overly focused on the single market and the target, which is unfavorable for risk control; In the foreign equity sector, there are also investments that are too concentrated for a few days, and a large investment in specific targets and foreign stocks. Shares with an investment amount of more than 1 billion yuan are only approved by the chief investment officer and lack an internal containment mechanism, which is also detrimental to internal control and risk supervision.
The FSC stated that it is expected to send an arbitration letter to New Life in the near future and require the company to adjust and improve its organizational structure within 3 months. New Life’s foreign investment ratio will be limited prior to upgrade and the upper limit of the ratio will not exceed the fund ratio. 40%, before adjustment and compliance, it is not allowed to invest in national and foreign stocks and subjects related to ETFs.
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