Tianfeng Securities Fine Formally Landed, How Will It Restart a New Phase?

Cailian Press, March 13 — (Reporter Lin Jian) Tianfeng Securities’ penalty has been officially implemented.

On March 13, Tianfeng Securities announced that it received the “Administrative Penalty Decision” issued by the Hubei Regulatory Bureau of the China Securities Regulatory Commission. The outcome is consistent with the previous notice, marking the full completion of the regulatory procedures. Tianfeng Securities stated that it sincerely accepts and resolutely complies with the decision, and has actively cooperated with investigations since the start of regulatory inquiries, proactively clarifying facts and assuming corresponding responsibilities.

Tianfeng Securities Announces Penalty Implementation

Regarding Tianfeng Securities’ investigation, Caixin has previously analyzed the situation in February in the article “Tianfeng Securities Penalty Settled: What Impact Will the Penalty Bring?” Overall, this penalty directly addresses historical issues from Tianfeng Securities’ period as a private shareholder, representing a comprehensive cleanup of illegal and irregular activities from 2020 to 2022.

With the formal issuance of the penalty document, Tianfeng Securities considers this a milestone, signifying the complete resolution of historical risks. The company has implemented thorough rectification measures, and its operations are stable and orderly. The company is now ready to enter a new stage of steady development.

Market participants have already formed clear judgments on the impact of this penalty, with core risks identified. It has not caused substantial operational disruptions, and notably, this violation does not pose a risk of delisting. Tianfeng Securities disclosed that the violations do not involve other risk warnings or mandatory delisting under the Shanghai Stock Exchange’s listing rules, alleviating concerns about the company’s stock being subject to risk alerts.

However, it is also important to note that Tianfeng Securities still faces ongoing impacts from a series of violations, including fines and the suspension of some businesses. Therefore, the industry and market are more focused on how Tianfeng Securities will initiate a new phase of development.

Penalty Implementation

According to previous disclosures by the CSRC, between 2020 and 2022, Tianfeng Securities provided illegal financing to the former largest shareholder, Contemporary Group, and failed to disclose related-party transactions with the group as required. The group and Tianfeng Securities engaged in illegal activities together, severely violating securities laws and regulations.

Specifically, the Hubei Regulatory Bureau imposed a maximum fine of 25 million yuan on Tianfeng Securities and Contemporary Group, and a total fine of 34.8 million yuan on nine responsible personnel. Additionally, the actual controller of Contemporary Group, Ai Luming, Tianfeng Securities’ then-Chairman Yu Lei, and then-Vice President and CFO Xu Xin, were permanently barred from securities markets. The bureau also took administrative measures such as suspending related businesses, ordering disciplinary actions against responsible personnel, and conducting regulatory interviews. The Shanghai Stock Exchange also imposed disciplinary sanctions in accordance with regulations. Responsibility for each individual was clearly established, directly related to participation in violations and signing relevant documents.

Tianfeng Securities received three regulatory documents this time, involving issues such as private placement operations, agency sales, internal control management, and more. The regulatory authorities took measures including suspending related businesses and issuing warning letters. The company also received a decision from the CSRC to initiate proceedings for suspected illegal disclosure of shareholding changes in Yong’an Forestry.

Review and State-Owned Capital Intervention for Comprehensive Rectification

Looking back, the root cause of Tianfeng Securities’ violations stems from a series of risk transmissions triggered by the former private major shareholder, Contemporary Group. In 2022, the group faced a severe crisis due to debt defaults, leading to the freezing of its holdings in Tianfeng Securities and high pledge ratios, which caused governance paralysis. More critically, Contemporary Group transferred its risks to Tianfeng Securities through non-operational capital occupation and other means.

As a result, Tianfeng Securities experienced talent loss, a decline in market value, and operational pressures. Meanwhile, minority shareholders and several state-owned investors also faced potential losses. Under this background, external intervention became urgent. In 2023, Hongtai Group, the only financial services state-owned enterprise in Hubei Province, officially took control, and Contemporary Group completely exited as a shareholder. However, the legacy issues still loomed as a Damocles sword over the company.

Hongtai Group adopted a strategy of “operating while repairing and transforming,” immediately launching comprehensive rectification efforts. They believe delaying would only enlarge risks, and proactive measures are necessary to maintain basic operations. Facing reputational damage and operational pressure, Hongtai Group first injected liquidity support to stabilize the company’s lifeline, while integrating development into serving the real economy and regional financial stability.

It is understood that during the initial investigation, Tianfeng Securities actively cooperated with regulatory inquiries and simultaneously initiated internal rectification, which did not affect current or future operations. Industry insiders close to the company stated that the company does not see the penalties as burdens but as an opportunity to rebuild market trust. Under state control and guided by Hongtai Group, the company has strengthened party leadership, optimized governance, improved comprehensive risk management, and reinforced compliance and risk assessment systems, laying a solid foundation for compliant operation.

Support at the capital level has also continued. Over three years, Hongtai Group has provided nearly 100 billion yuan in capital support, solidifying its role as a long-term strategic shareholder. By the end of 2023, it provided 4 billion yuan in subordinated debt to ease liquidity; in June 2024, it invested 502 million yuan in market-based share purchases; and by June 2025, it fully subscribed to a 4 billion yuan private placement, increasing its stake from 13.84% to 28.33%, further consolidating its state-controlled status.

In addition to capital injection, Tianfeng Securities has focused on governance restructuring, systematically rebuilding its compliance and risk control systems. The company has strengthened party-led research, improved the “three major and one big” decision-making mechanisms, established comprehensive compliance review processes across all business lines, enhanced subsidiary management, and promoted a compliance culture, holding all staff accountable for compliance. As of now, all rectification measures have been completed and implemented, significantly improving operational compliance. Tianfeng Securities officials stated that since 2023, the company has moved beyond its historical issues, with its focus shifting entirely to compliance and business development.

(Reporter Lin Jian, Caixin)