Chinese regulators revoked all licenses of CEFC Shanghai Securities Co., citing the brokerage’s unlawful actions including extending financing to parent company CEFC Shanghai International Group and its affiliates, reported Caixin.
The China Securities Regulatory Commission (CSRC) appointed Grandall Law Firm (Beijing) to carry out an administrative liquidation over a period of no longer than 12 months, while Guotai Junan Securities will take over the brokerage business during that period. The CSRC will dispatch an on-site working group to oversee the liquidation.
The decision followed an investigation that started in August 2018, which found the brokerage acted as an “automated teller machine” for its parent, using its own funds as well as clients’ assets under management to provide financing to CEFC Shanghai International, and transferring money to affiliates of the parent for purchasing and leasing properties, the CSRC said in a statement posted Friday on its website.