Tianfeng Securities Series of Penalties Implemented: Company and Related Responsible Persons Fined a Combined 41.7 Million Yuan; Private Fund Distribution Suspended for 2 Years

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Tianfeng Securities (Rights Protection) Co., Ltd. (referred to as “Tianfeng Securities,” 601162) has received multiple penalties.

Source: Shanghai Stock Exchange website

On March 14, Tianfeng Securities announced that on March 13, the company received an “Administrative Penalty Decision” issued by the Hubei Securities Regulatory Bureau. The announcement states that, regarding Tianfeng Securities’ alleged illegal financing and information disclosure violations related to Wuhan Contemporary Technology Industry Group Co., Ltd. (referred to as “Contemporary Group”), the Hubei Securities Regulatory Bureau imposed a fine of 15 million yuan on Tianfeng Securities. Five responsible persons who were involved at the time were fined a total of 21.3 million yuan. Among them, Tianfeng Securities’ then-Chairman Yu Lei and Vice President and CFO Xu Xin were permanently banned from the securities market.

Meanwhile, due to some employees promoting non-company-distributed financial products, Tianfeng Securities was suspended from selling private equity financial products for 2 years.

Additionally, due to suspected illegal disclosure of shareholding changes of Fujian Yong’an Forestry (Group) Co., Ltd. (“Yong’an Forestry”), the Hubei Securities Regulatory Bureau ordered Tianfeng Securities to correct the issue, issued a warning, and fined 4 million yuan; President Wang Linjing received a warning and a fine of 1.4 million yuan.

The Shanghai Stock Exchange also issued disciplinary actions against Tianfeng Securities and related responsible persons.

Permanent Market Ban for Former Chairman, Vice President, and CFO

The announcement shows that Tianfeng Securities, suspected of information disclosure violations and illegal financing, received a “Notice of Filing” from the China Securities Regulatory Commission on November 28, 2025, and a “Preliminary Administrative Penalty Notice” from the Hubei Securities Regulatory Bureau on February 13, 2026.

From 2020 to 2022, under the control of Contemporary Group, Tianfeng Securities used complex methods such as proprietary funds, client assets, private placement products, and reverse repurchase agreements to provide over 9 billion yuan in financing to shareholders and related parties. These related-party transactions were not disclosed, leading to significant omissions in the 2020-2022 annual reports.

Regarding the penalties, the announcement states: 1. Warning and a fine of 15 million yuan to Tianfeng Securities; 2. Warning and a fine of 6 million yuan to Yu Lei, then-Chairman; 3. Warning and a fine of 6 million yuan to Xu Xin, then-Vice President and CFO; 4. Warning and a fine of 3.3 million yuan to Zhai Chenxi, then-Vice President and Executive Vice President; 5. Warning and a fine of 3 million yuan to Wang Linjing, then-President and Director; 6. Warning and a fine of 3 million yuan to Feng Lin, then-Executive Vice President.

At the same time, due to the serious misconduct of Yu Lei and Xu Xin, the Hubei Securities Regulatory Bureau decided to impose a lifetime market ban on them.

The Shanghai Stock Exchange also publicly reprimanded Yu Lei, Wang Linjing, Zhai Chenxi, Feng Lin, and Xu Xin; officially determining that Yu Lei and Xu Xin are permanently unfit to serve as directors, supervisors, or senior managers of securities issuers. Other responsible entities will be handled separately. Issues involved include providing financing to shareholders or related parties and failing to fulfill disclosure obligations, resulting in major omissions in annual reports.

Suspension of Private Equity Product Sales for 2 Years, Tianfeng Tianrui Suspended from New Product Launch for 1 Year

The announcement shows that on March 13, Tianfeng Securities also received a decision from the Hubei Securities Regulatory Bureau to suspend related business activities, discipline involved personnel, and conduct regulatory talks, as well as a warning letter to Tianfeng Tianrui Investment Co., Ltd.

The bureau pointed out that Tianfeng Securities has four issues: 1. Some employees promoted non-company-distributed financial products; 2. The company illegally collaborated with Wuhan Contemporary Tianxin Wealth Investment Management Co., Ltd.; 3. The company illegally sold the Fusheng Anxin Stable No. 1 fixed-income private equity fund; 4. The company’s operational decisions were not prudent, with poor control over subsidiaries and branches, and ineffective risk management.

Further, the bureau noted issues such as inaccurate 2022 performance forecasts, irregular research report production and release, non-standard practices in investment banking projects, inadequate organizational restructuring of private fund business, personnel management and filing issues, and violations related to property company business scope commitments. These reflect deficiencies in management, internal control, and compliance.

Therefore, the bureau decided: Tianfeng Securities will suspend private equity product sales for 2 years from the date of this decision.

The announcement also states that Tianfeng Tianrui Investment Co., Ltd. (“Tianfeng Tianrui”) has issues such as operating beyond its scope, irregular management of private fund products, and non-market issuance of private debt.

The bureau decided to suspend Tianfeng Tianrui from launching new private fund products for 1 year and issued a warning letter. Tianfeng Tianrui cannot establish new private fund products within 1 year from the date of this decision.

According to Tianfeng Securities’ 2025 semi-annual report, Tianfeng Tianrui is a wholly owned subsidiary of Tianfeng Securities, mainly engaged in managing or entrusted management of equity investments and related consulting services.

As of June 2025, Tianfeng Tianrui and its subsidiaries managed 22 funds with a total registered scale of 4.091 billion yuan, with a paid-in scale of 2.992 billion yuan. In the first half of 2025, Tianfeng Tianrui recorded a net loss of 71.7799 million yuan, operating loss of 66.8139 million yuan, operating income of -50.7407 million yuan, total assets of 12.114 billion yuan, and net assets of 1.42 billion yuan.

Fujian Securities Regulatory Bureau Warning and Fine of 4 Million Yuan

On March 13, Tianfeng Securities also received a decision from the Fujian Securities Regulatory Bureau.

The bureau pointed out that on December 31, 2021, the Quanzhou Intermediate People’s Court of Fujian Province issued an “Execution Ruling,” ordering the defendant Su Mouxu and Fujian Nan’an Xiongguan Investment Center (Limited Partnership) to transfer 41.372 million shares of Yong’an Forestry and dividends to Tianfeng Securities to settle related debts, stating that “the above property rights transfer shall take effect upon delivery of this ruling.” On the same day, Tianfeng Securities, as the applicant, received the ruling, holding 12.29% of Yong’an Forestry’s total shares.

According to regulations, Tianfeng Securities should have disclosed this shareholding change promptly, but it only issued a “Notification Letter” on February 23, 2022, and a “Brief Equity Change Report” on March 7, 2022, to Yong’an Forestry. Yong’an Forestry disclosed relevant announcements on February 24 and March 9, 2022.

The bureau stated that Tianfeng Securities’ failure to disclose the shareholding change in a timely manner was illegal.

Therefore, the bureau decided: to order Tianfeng Securities to correct the issue, issue a warning, and impose a fine of 4 million yuan.

Further, the bureau pointed out that Wang Linjing, as Tianfeng Securities’ President, who was aware of the “Execution Ruling” on December 31, 2021, but did not organize timely disclosure of Yong’an Forestry’s shareholding change, was directly responsible for the failure to disclose.

The bureau decided: to warn Wang Linjing and fine her 1.4 million yuan.

2025 Expected to Return to Profit

On February 13, the CSRC website published “CSRC Strictly Investigates Tianfeng Securities’ Violations,” stating that from 2020 to 2022, Tianfeng Securities illegally provided financing to the former largest shareholder, Contemporary Group, and failed to disclose related-party transactions as required. The group and Tianfeng Securities jointly engaged in illegal activities, severely violating securities laws and regulations.

The CSRC emphasized that corporate governance is the foundation of high-quality listed company development, and compliance risk control is vital for steady growth. The violations by Tianfeng Securities show that, on one hand, major shareholders abuse their rights, illegally use securities firms for financing, and erode securities firms’ interests; on the other hand, securities firms breach compliance bottom lines and cooperate with illegal activities, which is severe and must be punished strictly according to law.

A month later, the penalties were finalized, and Tianfeng Securities received a fine of over 10 million yuan.

Sources close to Tianfeng Securities said that the penalties are consistent with the previous “Notice of Administrative Penalty,” marking the completion of regulatory procedures and a comprehensive cleanup of past issues from the private shareholder era. With the formal issuance of the administrative penalty decision, all related procedures are concluded, and the company has effectively severed past risks.

Official data shows that Tianfeng Securities is a provincial financial institution controlled by Hubei Hongtai Group, the only financial service enterprise directly under Hubei Province. Founded in 2000, headquartered in Wuhan, Hubei, it was listed on the Shanghai Stock Exchange on October 19, 2018, as the first financial institution in Hubei to go public via IPO.

Tianfeng Securities has total assets close to 100 billion yuan, a registered capital of 10.074 billion yuan, with 29 branches, 77 business departments, and multiple wholly owned or controlling subsidiaries, employing over 2,700 staff.

In terms of equity, Tianfeng Securities’ 2025 Q3 report shows that as of the end of the reporting period, the shareholders holding more than 5% were Hubei Hongtai Group Co., Ltd. (28.14%) and Wuhan State-owned Capital Investment Operation Group Co., Ltd. (7.50%).

Regarding performance, the previously disclosed profit forecast indicates that, based on preliminary calculations by the finance department, Tianfeng Securities expects a net profit attributable to the parent of between 125 million and 185 million yuan in 2025, turning from loss to profit; net profit after deducting non-recurring gains and losses is expected to be between 138 million and 198 million yuan.

According to Dazhihui VIP, as of the close on March 13, Tianfeng Securities closed at 3.96 yuan per share, down 1.25%.

(Source: The Paper)