Western Securities' Investment Banking Projects Hit by Multiple Failures, Systemic Internal Control Deficiencies Draw Renewed Attention

Jiemian·4 Aug 2026·Read original

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Summary · why it matters

Western Securities' investment banking arm has seen a string of project failures recently, exposing systemic internal control deficiencies. On July 28, the Jiangxi Securities Regulatory Bureau imposed a fine of 17.9 million yuan on Yuweng Information Technology for fraudulent issuance in its STAR Market IPO. Western Securities acted as the sponsor, and the liability determination for its signing sponsor representatives Gao Feng and Su Huafeng has yet to be announced. Earlier in June, the Shanghai Stock Exchange issued a regulatory warning to Western Securities sponsor representatives Zhang Suxian and He Si for failing to perform their duties adequately in the ST Xin'an convertible bond project, not detecting that the company had used improper accounting treatments to embellish its performance, resulting in the company not meeting issuance conditions in substance. In May this year, the Jiangxi Securities Regulatory Bureau fined Su Huafeng and Shi Zheyuan a total of 1.9 million yuan. The two held shares in a pre-IPO company through entrusted shareholding in violation of regulations, and both were signing sponsor representatives for the Xin'an Century STAR Market IPO project, which generated over 41.88 million yuan in sponsorship and underwriting fees for Western Securities. Additionally, Western Securities issued conclusions contradicting regulatory findings in its ongoing supervision of ST Nanxin, and received a verbal warning for information disclosure violations in its supervision of Dingli Technology's listing. As early as 2023, the China Securities Regulatory Commission pointed out that Western Securities had issues such as inadequate follow-up on quality control and core review opinions, excessive emphasis on scale and revenue in assessments, and ineffective internal accountability. Nearly three years on, these problems remain fundamentally unresolved, and in March this year the firm was fined 460,000 yuan for anti-money laundering violations. Industry insiders note that the root cause lies in compliance and risk control giving way to business expansion under a scale-first orientation, with assessment incentives decoupled from risk, risk control lacking substantive veto power, and internal accountability existing in name only.

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