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Beijing Business Daily
According to media reports, as early as 2015, Wang Zelong, a young adult, took 14Pokerungar310 million yuan subscribed for 53 million shares to be issued by Longbai Group, which is engaged in the production of titanium dioxide; after the expiration of the sales limit, he successively reduced his holdings and cashed out four times, making a net profit of more than 1 billion.
According to the administrative penalty decision recently released on the official website of the CSRC, 235 million yuan was confiscated by CSRC's actual controller Wang Zelong and his friend Hong Haowei, CSRC former secretary Han Yuchen, CITIC Securities, Haitong Securities and CITIC Securities for violating restrictions on the transfer of shares of China Nuclear Titanium White (002145 SZ) in 2023 and illegal information disclosure. Among them, Wang Zelong was fined 133 million yuan.
China Nuclear Titanium dioxide, formerly known as the 404 Titanium dioxide Branch of China National Nuclear Industry Corporation, was listed on the Shenzhen Stock Exchange in 2007. It is mainly engaged in the research, development, production and sales of titanium dioxide, a chemical product, with an annual output of 550000 tons. Its production capacity ranks second in the country and fifth in the world.
According to the Southern Metropolis Daily, Wang Zelong was born in Jieyang City, Guangdong Province in 1996. He was only 28 years old and graduated from the Beijing Film Academy. According to media reports, as early as 2015, the young adult Wang Zelong subscribed for 53 million shares of 002601 SZ Group, which is engaged in titanium dioxide production, for 1.431 billion yuan. After the expiration of the sales limit, he reduced his holdings four times and made a net profit of more than 1 billion yuan.
Wang Zelong ranked second with a fortune of $1.5 billion (10.8 billion yuan) on the world's youngest billionaires list released by Forbes in April 2021. On March 25 this year, the Hurun Research Institute released the 2024 Hurun Global Rich list, in which Wang Zelong ranked 3058 with 7.2 billion yuan.
According to the findings of the China Securities Regulatory Commission, Wang Zelong conspired with CITIC Securities, CITIC Securities, Haitong Securities and Han Yuchen to implement the fixed increase and short selling arbitrage business from September 2022 to February 2023. In addition, Wang Zelong also concealed his actual participation in non-public offerings, leading to false records in the announcements of listed companies.
In July 2022, China Nuclear Titanium dioxide's application for non-public offering of shares was examined and approved by the China Securities Regulatory Commission. During the same period, however, Citic recommended to Wang Zelong a fixed increase in short arbitrage scheme, which allows customers to bypass the six-month lock-up period and settle earnings in advance through the over-the-counter derivatives trading platform.
Wang Zelong decided to implement the arbitrage scheme in September 2022, lending shares through the CNPC Titanium dioxide employee Stock ownership Plan and trading over-the-counter derivatives with CITIC CITIC in the name of a certain Investment Development Co., Ltd. (hereinafter referred to as "An Investment Company"). However, due to the lack of funds for subscription by An Investment Company, Wang Zelong introduced Hong Haowei to join the carry trade in February 2023, and Hong Haowei participated in the name of a certain No. 1 private equity investment fund (hereinafter referred to as "Fund No. 1").
From September 2022 to February 2023, Wang Zelong discussed and implemented the securities arbitrage business with Han Yuchen, CITIC CITIC and CITIC Securities, involving the hedge trading of 88 million medium-core titanium dioxide stocks. In addition, CITIC CITIC and Haitong Securities communicated on the income swap business linked to the non-public offering of titanium dioxide shares in November 2022, which was examined and approved by CITIC Securities Compliance Department and the risk Management Committee in December.
In February 2023, Haitong Securities participated in the first round quotation of the non-public offering of China Nuclear Titanium dioxide and determined the offering price. Subsequently, Haitong Securities and CITIC Securities and other parties signed a number of income swap agreements linked to China Nuclear Titanium dioxide stocks.
From February 6 to February 14, 88 million shares of medium-core titanium dioxide shares held by CNPC employees' stock ownership plan were allocated to four private equity product accounts in accordance with the path specified by CITIC. The loan period is extended and renewed until September 2023.
From February 13 to February 21, four private equity fund product accounts sold 88 million medium-core titanium dioxide shares at an average price of about 7.63 yuan per share, with a transaction value of about 671 million yuan.
On March 9, China Nuclear Titanium dioxide announced the listing of this non-public offering, which will be restricted to September 8. From March 17 to April 6, An Investment Company and No. 1 Fund applied to Citic CITIC for early termination of all long vanilla option contracts and short income swap contracts, and CITIC closed the corresponding positions and settled.
According to the administrative penalty letter of the CSRC, Wang Zelong made a profit of 58.16 million yuan through the investment company, while Hong Haowei and Wang Zelong made a profit of 14.19 million yuan and 2.48 million yuan respectively through the No. 1 fund. Citic Securities has no actual profit. Citic Securities margin business income is 1.91 million yuan, Haitong Securities income swap business income is 790000 yuan.
After investigation, the CSRC believes that the above-mentioned acts of Wang Zelong and Hong Haowei actually participated in non-public offerings through derivatives trading arrangements, sold securities at market prices, locked in the difference between the discounted price of non-public offerings and non-public offerings in advance, evaded the sales restriction period in disguise, violated the Securities Law and other provisions, and constituted the illegal situation mentioned in the Securities Law.
In the end, the total amount of the confiscation was 235 million yuan, of which Wang Zelong was confiscated a total of 133 million yuan.