Oriental Securities issued a warning letter regarding incomplete compliance and risk management control

Whale News, March 20 — Recently, the Shanghai Regulatory Bureau of the China Securities Regulatory Commission issued an administrative regulatory decision letter targeting Orient Securities Co., Ltd.

The decision letter states that Orient Securities Citibank Securities Co., Ltd. (renamed Orient Securities Underwriting and Sponsoring Co., Ltd. after being absorbed and merged into Orient Securities Co., Ltd.) served as an independent financial advisor for Guangyuyuan Chinese Medicine Co., Ltd.'s issuance of shares to acquire assets and raise supporting funds in a related-party transaction. During ongoing supervision, it failed to maintain reasonable professional skepticism regarding the authenticity of sales activities and the accuracy of sales expenses, did not conduct necessary prudent verification when using the professional opinions issued by accounting firms, and inadequately supervised the completion of performance commitments. The related ongoing supervision reports and special verification opinions issued were inaccurate.

These issues reflect inadequate company compliance controls and violations of the “Administrative Measures for Major Asset Restructuring of Listed Companies,” “Administrative Measures for Financial Advisory Business in Mergers and Acquisitions of Listed Companies,” and “Regulations on Compliance Management of Securities Companies and Securities Investment Fund Management Companies.”

In response, the Shanghai Regulatory Bureau of the China Securities Regulatory Commission has decided to issue a warning letter as a supervisory measure to Orient Securities Co., Ltd.