What will be the legal consequences if LeTV’s fraudulent listing is realized? This can be done with a simple analysis based on assumptions. The following is a legal analysis by Xu Feng, a professional securities rights lawyer.
1. May face investigations and administrative penalties from the China Securities Regulatory Commission.
This is the most common result at present. A very small number of companies that make false statements during the IPO stage can escape administrative penalties from the China Securities Regulatory Commission, although in some cases these companies have not committed a major crime in the name of fraudulent issuance. . For example, Greenland in the early days and Yisheng Pharmaceuticals, which was punished in recent years, were punished by the China Securities Regulatory Commission due to problems during the issuance stage.
2. May face criminal judgment from the court.
In fact, there are not many precedents for listed companies involved in fraudulent issuance and false statements to be held criminally responsible. However, if the nature of the fraudulent issuance is serious and reaches a tolerable level, then the person responsible for the fraudulent issuance There is also the possibility of being held criminally responsible. Similarly, Green Dadi is a very typical case. He Xuekui and others were sentenced to fixed-term imprisonment and other criminal penalties by the court. And if LeTV is really involved in the crime of fraudulent distribution, who should bear this responsibility? After all, this is still unknown. Even whether LeTV is suspected of fraudulent distribution is just a rumor and there is no conclusion.
3. Is it possible that LeTV will be delisted?
If there are indeed fraudulent issuances or other major information disclosure violations, the possibility of delisting is not ruled out. But this is just theoretical speculation. Since the new delisting policy, if the information disclosure is determined by the China Securities Regulatory Commission to be a major violation of law or suspected of crime and transferred for criminal liability, it may trigger forced delisting. Previous cases such as Xintai Electric and Boyuan Investment can be used as preliminary references.
4. If LeTV fakes its listing, it may trigger large-scale investor claims
LeTV has been suspended from trading for a long time, and a large number of investors have been locked out. Once suspected fraudulent listings are investigated by the China Securities Regulatory Commission, the stock price will inevitably fall sharply after the resumption of trading, combined with previous operating performance and other factors. In similar cases, such as the recent China Security, more than 20 companies have fallen to the limit. What LeTV's situation will be, we can only wait for the market to test it. But if the stock price falls, it will inevitably cause losses to investors. Once the fraud is listed, investors who have suffered huge losses will inevitably initiate claims against LeTV and other entities through civil claims. How big is the scale likely to be? It’s hard to say. Cases that can be referred to include the investors of Great Wisdom, who are currently suing for about 300 million yuan, and the investors of Hairun Solar, who are suing for about 200 million yuan. There are countless such cases.
5. Once the real and fake products are on the market, will LeTV have a proactive compensation plan?
Based on the current situation of shareholders, we believe that even if LeTV is eventually determined to be a fraudulent listing, the possibility of relevant parties taking the initiative to pay compensation is still very high.
Of course, when rumors involving LeTV’s fraudulent listing are rampant in the market, should LeTV itself give investors a clear explanation? How should regulatory authorities respond quickly to market concerns? This is an issue that investors pay close attention to. It is recommended that relevant parties respond quickly and efficiently to issues of concern to the market and investors accurately and authoritatively.