Zhitong Financial APP learned that on September 15, the Securities Regulatory Commission reported the progress of the investigation into the illegal reduction of shares in "603326.SH" by Fan Yi and his co-actors. After investigation, in 2021, when Fan Yi and his actors bought 5% of the shares of "I Le Home" through the secondary market, they failed to fulfill the obligation of information disclosure in accordance with the regulations, and was issued a warning letter by the CSRC. Prior to this illegal reduction, Fan Yi and his concerted actors held more than 22.44 million shares of "I Le Home" shares, accounting for 7.11% of the company's total share capital. From September 5 to September 6, 2023, Fan Yi and his actors reduced all the above-mentioned stocks and did not stop trading in accordance with the law when the proportion of reduction reached 5%. The subsequent illegal transaction amount was 107 million yuan and the illegal proceeds were 16.53 million yuan. The CSRC intends to confiscate the aforementioned illegal income from Fan Yi and his concerted actors in accordance with the law, and impose a severe fine of 32.95 million yuan. In the next step, the CSRC will resolutely implement the decision and deployment of the CPC Central Committee on "activating the capital market and boosting investor confidence," step up efforts to improve the laws and regulations on the reduction of shares, and further intensify the crackdown on illegal reduction. Prompt investigation, heavy punishment, found together, investigation and punishment together, so that those who dare to break the law should be punished and pay a heavy price.

The full text is as follows:

The Securities Regulatory Commission informed the progress of the investigation into the illegal reduction of "I Le Home" shares by Fan Yi and his actors.

Recently, in accordance with the overall requirements of the CPC Central Committee and the State Council on strictly cracking down on illegal securities activities in accordance with the law, the CSRC filed an investigation into the illegal reduction of stock holdings by Fan Yi, a major shareholder of "I Le Family" and his concerted actors, and quickly ascertained the illegal facts. investigate administrative legal responsibility as soon as possible, and serve a "notice of administrative punishment in advance" on the relevant parties.

Major shareholders of listed companies, Dong Jiangao, who illegally reduce their holdings of stocks, undermine the integrity of the market, disrupt the normal trading order, and harm the interests of the majority of small and medium-sized shareholders. In the near future, I will further standardize the behavior of share reduction and guide major shareholders and actual controllers of listed companies to jointly maintain a healthy market ecology. In disregard of laws and regulations and regulatory requirements, Yu Fanyi and his concerted actors openly and illegally reduce their holdings of the company's shares, which is of a serious nature and bad influence, and should be severely punished.

After investigation, in 2021, when Fan Yi and his actors bought 5% of the shares of "I Le Home" through the secondary market, they failed to fulfill the obligation of information disclosure in accordance with the regulations, and I will issue a warning letter. Prior to this illegal reduction, Fan Yi and his concerted actors held more than 22.44 million shares of "I Le Home" shares, accounting for 7.11% of the company's total share capital. From September 5 to September 6, 2023, Fan Yi and his actors reduced all the above-mentioned stocks and did not stop trading in accordance with the law when the proportion of reduction reached 5%. The subsequent illegal transaction amount was 107 million yuan and the illegal proceeds were 16.53 million yuan. I will confiscate the aforementioned illegal income from Fan Yi and his co-actors in accordance with the law, and impose a severe fine of 32.95 million yuan.

Shareholders holding more than 5% of shares are important shareholders of listed companies, have special responsibilities to the company, and are the "key minority" in the operation, development and governance of the company. The new Securities Law further strengthens the regulation of the reduction of shareholders' holdings, and has special obligations in buying and selling, information disclosure and so on. I hope that major shareholders, actual controllers and relevant senior executives of listed companies will learn from this case, be vigilant at all times, draw profound lessons, faithfully fulfill their fiduciary obligations, strengthen the spirit of good faith and contract, enhance their awareness of law-abiding and compliance, and standardize the reduction of stock holdings in strict accordance with the requirements of the Securities Law, the Company Law and relevant regulatory rules.

In the next step, I will resolutely implement the decision and deployment of the CPC Central Committee on "invigorating the capital market and boosting investor confidence," step up efforts to improve the laws and regulations on the reduction of shares, and further intensify the crackdown on illegal reduction. Prompt investigation, heavy punishment, found together, investigation and punishment together, so that those who dare to break the law should be punished and pay a heavy price.

This article is edited from the official account of Wechat issued by the Securities Regulatory Commission. Huang Xiaodong, Financial Editor of Zhitong.