Caixin Securities News on September 13 (Reporter Lin Jian) According to the latest regulatory information, the China Securities Regulatory Commission has issued an administrative penalty decision to Chongqing Hifuture Information Technology Co., Ltd. and others for their illegal disclosure of information.

According to the penalty decision, Hifuture Technology was fined 2 million yuan, the chairman and chief financial officer were fined 1 million yuan and 0.5 million yuan respectively, the vice president of Hifuture Technology, chairman and general manager of Dolemon Kou Han were fined 3 million yuan, and the personnel responsible for preparing Dolemon's financial data Zhu Bo was fined 0.5 million yuan, totaling 7 million yuan.

It is understood that on November 7, 2022, after the China Securities Regulatory Commission launched an investigation into Hifuture Technology for suspected illegal disclosure of information, in January 2024, the China Securities Regulatory Commission issued a notice of administrative penalty to Hifuture Technology and related responsible persons, and then held a hearing to listen to the statements and defense opinions of the parties involved.

By reviewing the entire process of the case, the journalist found that the results of this administrative penalty reflect the content of the "Basic Rules for Administrative Penalty Discretion of the China Securities Regulatory Commission" initiated by the China Securities Regulatory Commission in June this year. The "Discretionary Rules" have completed the solicitation of opinions.

The "Discretionary Rules" stipulate that administrative penalty discretion should be based on facts, commensurate with the facts, nature, circumstances, social harm, and extent of subjective fault of the illegal act. Caixin Securities has previously interpreted the document.Industry insiders believe that administrative penalties should not only be bold in confronting egregious illegal acts, but also comprehensively examine the nature and circumstances of the illegal acts by the parties involved, fully consider the social harm of the illegal acts, and achieve strict, standardized, fair, and civilized law enforcement.

Reflecting the law enforcement concept of "pursuing the main culprits".

The capital markets involve many participants, and the operating mechanism is extremely complex. Therefore, in order to build a sound market ecosystem, effective management of the capital markets, which are jointly constructed, jointly governed, and jointly enjoyed, must be implemented.

On the one hand, the penalty decision shows that before the China Securities Regulatory Commission (CSRC) imposed the penalty, Shenzhen Hifuture Information Technology Co., Ltd. (Hifuture Technology) actively reported the illegal activities involved to the regulatory authority and cooperated with the regulatory investigation, actively made corrections for errors, and had a good attitude of admitting wrongdoing. It can be seen that Hifuture Technology voluntarily reported and actively conducted inspections for rectification, and promoted error correction. In light of these circumstances, the regulatory authority imposed a lenient penalty on Hifuture Technology, reflecting the aforementioned law enforcement philosophy.

On the other hand, the penalty decision also shows that through careful study and review of the statement and defense materials by the CSRC, the CSRC recognized the circumstances put forward by the party concerned, such as "the false profit disclosure of Hifuture Technology resulting from subsidiary Duoke Meng's failure to timely carry forward the cost and expenses, voluntary reporting to the regulatory authority and request for investigation by the regulatory authority before the regulatory authority discovered the matter, actively conducting inspections for rectification, and voluntary error correction", and fully considered the relationship between the responsibilities of the relevant personnel and the illegal activities.

Specifically, this case involves the false financial data of Duoke Meng, a subsidiary of Hifuture Technology, resulting in Hifuture Technology's violation of disclosure obligations. In this case, administrative penalties were imposed on Duoke Meng's Chairman Kou Han and the financial personnel Zhu Bo, with Kou Han receiving a higher penalty than the chairman and CFO and a higher penalty than Hifuture Technology. This reflects the law enforcement philosophy of "targeting the ringleader" and at the same time avoids causing "secondary harm" to minority shareholders in listed companies.

Some interviewed lawyers believe thatWhile adhering to the "strict" tone of administrative law enforcement, regulatory authorities also uphold the principles of objectivity and fairness, and do not go too far or show undue leniency. They focus on determining penalties based on the facts of the case and the degree of social harm in cases of violations of information disclosure by listed companies, ensuring that penalties are proportional, while also increasing the punishment for "leading wrongdoers" and the "key few".

Emphasizing proportional penalties and avoiding excessiveness or undue leniency

The "Administrative Penalty Discretionary Rules of the China Securities Regulatory Commission", which has completed the solicitation of opinions, has attracted much attention from industry insiders. This is a further implementation of the requirements of the "Opinions of the State Council and the Chinese People's Political Consultative Conference on Enforcing the Law Strictly to Crack Down on Securities Violations" and the "Opinions of the State Council on Further Regulating the Formulation and Management of Administrative Discretionary Benchmarks and Criteria", including strengthening unified law enforcement, formulating administrative penalty discretionary benchmarks, and regulating law enforcement practices. This is the CSRC's first normative document that systematically sets out the benchmarks for administrative discretion in the capital markets.

In the view of legal professionals, the promulgation of the "Discretionary Rules" can better protect the legitimate rights and interests of the people and stabilize market expectations. Among them, the "Discretionary Rules" stipulate different circumstances for the application of penalties, reasonably refine specific circumstances in accordance with the law, clarify the boundaries of discretionary levels, and avoid penalties that are excessive or too light through proportional punishment and a lenient approach.

The "Discretionary Rules" not only have a strong deterrent effect on serious illegal acts, but also show some tolerance for minor violations. This differentiated penalty mechanism aims to provide a flexible framework for handling cases, achieving the unity of legal and social effects: for illegal situations that disrupt market stability, hinder law enforcement, and repeat violations, heavier penalties will be imposed; acts that actively mitigate harm, voluntarily confess illegal acts, and cooperate actively with regulatory agencies in their investigations and handling will be given lighter or lenient punishment.