More than 30 trusts have been fined a total of more than 45 million yuan since 2023

More than 30 trusts have been fined a total of more than 45 million yuan since 2023

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Under the background of strong industry supervision, trust companies frequently receive fines. Flush data shows that as of press time, China’s trust industry has received nearly 60 fines since 2023, involving more than 30 trust companies, with a total fine of more than 45 million yuan. Among them, Cedar International Trust (referred to as “Cedar Trust”) alone was fined more than 10 million yuan. Industry experts said that under the guidance of the new classification of trust business, trust regulatory policies continue to be upgraded, and strong supervision will remain normalized.

  Several trust companies were subject to administrative penalties

The administrative penalty information disclosure form recently released by the Beijing Supervision Bureau of the State Financial Supervision and Administration Bureau (hereinafter referred to as the “Financial Supervision Administration”) shows that due to multiple violations such as failure to perform prudent and diligent business, review of the authenticity of accounts receivable, and dereliction of fund monitoring, In fact, Yingda International Trust Co., Ltd. (referred to as “Yingda Trust”) and a number of relevant responsible persons were administratively punished. Among them, Yingda Trust was fined a total of 1 million yuan, and Liu Jinzhou, then general manager of the third trust business department, and Wang Tao, then head of the Beijing business team and asset securitization working team, were both given warnings.

On January 15 this year, the administrative penalty information disclosure form released by the Ningbo Supervision Bureau of the State Administration of Financial Supervision showed that Kunlun Trust Co., Ltd. (“Kunlun Trust”) had 8 major violations of laws and regulations, including undertaking risky projects in violation of regulations in various ways. , were fined a total of 5.4 million yuan. On February 5, the Shanxi Supervision Bureau of the State Administration of Financial Supervision disclosed that Wei Dongdong, then general manager of the Small and Medium Enterprises Division II (Debt Trust Department) of Shanxi Trust Co., Ltd. (referred to as “Shanxi Trust”), failed to conduct due diligence on Shanxi Trust and the establishment of Shanxi Trust. Those responsible for irregular announcements, inadequate management of trust plans, and inadequate information disclosure were given warnings and penalties.

Flush data shows that since last year, more than 30 trust companies, including China Railway Trust, Bairui Trust, Shanxi Trust, Cedar Trust, Xiamen Trust, Chongqing Trust, Yunnan Trust, China Resources Trust, Industrial Trust, China Credit Trust, etc., have received The fines from the State Administration of Financial Supervision involve a number of well-known institutions and relevant responsible persons, with the total amount of fines reaching 45.42 million yuan. Among them, there were 11 fines with a single fine exceeding 1 million yuan.

  Cedar Trust was fined more than 10 million yuan last year

It is worth mentioning that in terms of fine amount, Cedar Trust received the largest fine in 2023. Specifically, Cedar Trust was fined 6.9 million yuan by the Jiangxi Supervision Bureau of the State Administration of Financial Supervision in September 2023 due to multiple violations of laws and regulations, including illegally providing financing to local governments and accepting government guarantees, and providing loans to unqualified companies. Financing provided by developers, poor financial management, misappropriation of funds by major shareholders, insufficient provision for asset impairment, irregular salary management, improper establishment of trust projects and post-investment management, and provision of financing to projects that do not meet regulations, etc. Relevant senior executives of Cedar Trust were given warnings and fined a total of 2.6 million yuan. In addition, Cedar Trust was fined 2.2 million yuan and 500,000 yuan respectively for other violations in June and February 2023. Overall, including the penalties imposed on relevant responsible persons, Cedar Trust’s cumulative fines in 2023 will reach tens of millions of yuan.

The reporter noticed that many trust companies were fined related to real estate. For example, among Shanxi Trust’s illegal matters, “trust funds were used in disguised form for land reserves”; among the reasons for Cedar Trust’s fine were “providing financing to real estate development projects whose developer qualifications did not meet the standards” and so on. In addition, many trust companies have been punished due to data quality issues. For example, Kunlun Trust was fined 800,000 yuan by the Ningbo Supervision Bureau of the State Administration of Financial Supervision due to “misreporting of standardized regulatory data and inconsistent cross-checking of standardized regulatory data”, and the relevant responsible persons were warned; Yunnan Trust was fined 800,000 yuan for “some off-site regulatory statistical data” “Inconsistent with the facts” and other violations of laws and regulations, the supervisor was fined 600,000 yuan.

  Strong supervision reshapes industry ecology

“Adhere to taking risk prevention and control as the eternal theme of financial work. Real estate, local debt, and small and medium-sized financial institutions are key areas for financial risk prevention. They are also business areas that are involved in many trust companies’ business cooperation. They need special prevention and attention, and early warning of risks. Identification, early warning, early exposure, and early disposal.” Yuan Tian, ​​a special researcher of the China Trusteeship Association, said that in the face of the coexistence of pressure on industry transformation and opportunities for new business expansion, since 2023, shareholders and management of trust companies in the industry have Changes are frequent, and more than 30% of directors, supervisors and senior executives of trust companies have changed. On the one hand, this will accelerate the strategic adjustment of trust companies and deepen and promote business transformation. On the other hand, it will also bring uncertainty and challenges to corporate governance.

In addition, regulatory penalties also involve other violations of laws and regulations, which mainly include seven aspects: failure to perform due diligence before lending and post-loan management, leading to project risks or misappropriation of trust funds; non-clean disposal of trust projects and transfer of credit assets; trust Insufficient management of product net value; false reduction of financing trust and channel businesses; rigid redemption in violation of regulations; violation of the identification and number of qualified investors in the sales process; failure to disclose information to investors in accordance with regulations, etc. For example, trust companies such as China Railway Trust, Xiamen Trust, and Cedar Trust have lax post-loan and post-investment management, leading to the misappropriation of trust funds; China Railway Trust and Jingu Trust have violated regulations such as “non-clean” disposal of trust projects and transfer of credit assets; China Resources Trust and Cedar Trust have the problem of insufficient net worth management of trust products.

“Penalty is just a means, not an end. Tighter supervision can have a better warning effect. Although it will cause pain to some trust companies in the short term, it will be conducive to the healthy and standardized development of the industry in the long term.” A senior person in the industry believes that, Although trust fines have increased in recent years, overall industry risks are controllable. In response to the many chaos in the financial market in recent years, regulatory authorities have increased penalties and accountability, increased the cost of violations, and deterred violations. A good atmosphere for strong supervision is accelerating.

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