First Capital subsidiary fined over due diligence failures

First Capital Securities announced today that its subsidiary, First Capital Investment Banking, received an administrative penalty decision from the China Securities Regulatory Commission's Jiangsu regulatory bureau on December 25, 2025. The penalty stems from First Capital Investment Banking's failure to diligently perform its continuous supervision duties as a sponsor for Hongda Xingye Co., Ltd.'s 2019 convertible bond issuance. This included inadequate verification of raised funds and false statements in supervision documents.

As a result, First Capital Investment Banking has been ordered to rectify its practices, issued a warning, had its sponsorship business income of yuan 4,245,283.02 confiscated, and fined yuan 12,735,849.06. Additionally, the project's representatives, Song Yao and Fan Benyuan, each received a warning and a fine of yuan 1,500,000.

First Capital Securities stated that the violations did not trigger major compulsory delisting conditions for the company and do not significantly impact its operations, financial status, or solvency. The company emphasized its commitment to strengthening professional quality control and improving its investment banking practices.