Domestic securities turmoil of securities turmoil

Before the promulgation of the Securities Law on July 1, 1999, several major events occurred one after another. The main ones include:

The "8.10" Shenzhen Stock Offering Event

From August 9 to 11, 1992, Shenzhen issued 500 million yuan in new shares through a subscription lottery. Since the 8th, more than 1 million quasi-stockholders locally and across the country have queued up in front of 302 sales outlets in the city, preparing to buy lottery tables worth 100 yuan each. Fashion was able to maintain a certain order when it started selling on the morning of the 9th. However, problems with the organization of some outlets later caused chaos and conflicts. By the morning of August 10, all lottery tables were sold out. That evening, thousands of investors who had not bought a lottery ticket marched on Shennan Middle Road in the city, carrying slogans against corruption and demanding justice, and formed a siege on the city government and the People's Bank of China.

Stock Subscription Certificates

In January 1992, a new gadget called "Stock Subscription Certificates" became popular in Shanghai.

On May 21, the Shanghai Stock Exchange relaxed the price restrictions on only 15 listed stocks, triggering a surge in the stock market. Since there is no daily limit, the Shanghai stock market rose by 105% in one day. Subsequently, the stock index surged for two consecutive days. More and more people are beginning to believe that Chinese stocks can make people rich overnight.

August 9 (Sunday) and August 10 (Monday). The long-awaited lottery table for subscription of new shares in Shenzhen has been released. People lined up in front of each watch sales outlet three days in advance. On the morning of the 9th, there was already a queue of 1 million people. Tens of millions of ID cards in bundles were delivered to Shenzhen by express mail. People queuing up, regardless of gender, old or young, married or unmarried, hugged each other heart to heart for 10 hours. Although it rained heavily at 4 p.m., people said "nine thousand thunderbolts can't blast it". As of 9 pm on August 9, all 5 million new share subscription lottery forms have been issued. However, the practice of secretly arbitraging subscription forms for personal gain was discovered by many people. Speculation on subscription forms is rampant in front of sales outlets, with a form priced at 100 yuan having been sold for 300 to 500 yuan. The bank issued an announcement at this time to extend the collection period of the acquisition form to August 11. Many people think there is a scam here. At 11 p.m. on August 10, the assistant to the mayor of Shenzhen came forward, met with the petitioners, and announced five notices from the city government, deciding to issue an additional 500,000 subscription forms to ease the purchasing pressure. But people still didn't disperse... At 12 midnight, the police and demonstrators began to clash. Shenzhen police arrested 12 "troublemakers." At 2:00 pm on August 11, the newly issued 500,000 new share subscription lottery ticket exchange coupons went on sale, and all were sold out the next day, in good order. On the evening of August 11, Shenzhen Mayor Zheng Liangyu gave a televised speech: “On the evening of the 10th, a very small number of lawless elements took advantage of the short supply of new stock lottery tables in our city and some shortcomings in organizational work to gather people to cause trouble, seriously damaging social security and endangering public security. To ensure the stability and unity of the Special Administrative Region. ...Every one of us citizens must understand the general situation, consider the overall situation, and cherish the hard-won stability and unity of the Special Administrative Region."...

Stock fraud amidst the "8·10" crisis. After four months of investigation, the investigators found out: 11 financial units in the city had set up 300 sales points, and 10 units had 95 sales points reported by the public; they were screened out from more than 2,900 complaints from the public. There were 62 key clues, involving 75 people from 20 units in 5 systems including finance, supervision, industry and commerce, and public security, including 22 cadres at division level or above. As of December 10, 105,399 lottery expressions for internal interception of private purchases had been identified, involving 4,180 cadres and employees in the financial system. Among them, employees within the financial system bought nearly 65,000 tickets privately, on-duty and supervisory personnel bought more than 20,000 tickets privately, and purchased nearly 20,000 tickets for related households. 62 key clues of complaints from the masses have been verified, 57 cases involving 68 people, 38 cases involving 43 people, and 38 cases found to be true or partially true. Among them, there are 11 department-level cadres, 22 section-level cadres, 10 general cadres and employees; 23 party members; 30 people are in the financial system, 8 are in the industrial and commercial system, 4 are in the public security system, and 1 is in an enterprise unit. Among the nine people who were finally publicly punished for "heinous crimes", seven were heads of units or departments.

Revelation from the subscription warrant crisis: Subscription warrants are a miracle created by the Chinese stock market. Some people described the stock market at that time as simply a fool's errand. The stock is being speculated higher and higher until it is so high that there is no limit to it. Let's see who is the stupidest to catch the last stick.

And as Yang Wanwan once said: Fools in the Chinese stock market are like leeks in the field, one crop grows after another.

It is true that many first-generation investors made a fortune, but many of them have disappeared today. Because most of the first generation investors do not have very high financial expertise, many of them just follow the trend. There are some cases of people who have successfully developed their own businesses or retained part of their assets to live a comfortable life, but the vast majority of people first became rich overnight and then gradually lost or used up all their money. Now they are no different from ordinary citizens. The reasons why the first generation of investors suddenly became rich but soon disappeared include the investors themselves, policies and opportunities, as well as the special background of the times that China was in at that time. It is a comprehensive product of an era. From today's perspective, these experiences have a great enlightenment effect on the development of China's stock market.

The "8·10 Incident" triggered a plunge in the Shanghai and Shenzhen stock markets. On August 10 (Monday), the Shanghai stock market fell below 1,000 points as soon as the market opened. The psychological defense line that many parties had worked hard for for several months collapsed. On the 11th, the market plunged another 100 points, a drop of more than 10% that day. On the 12th, selling orders came overwhelmingly, and the index fell to 590 points at the noon break and closed at 860 points. In the end, the Shanghai Composite Index plummeted from 964 points on August 10 to 781 points on August 12, a drop of 19%.

Correspondingly, the closing points of the Shenzhen component stock index on August 7 (Friday) were 2814 points, on August 10 it was 2883 points, and on the 11th it was 2733 points, a drop of 150 points; 12 It fell again on the 13th, closing at 2727 points; and on the 13th, it closed at 2644 points, a total loss of 239 points before and after. The Shenzhen stock index plummeted from 310 points on August 10 to 285 points on August 14, a drop of 8.1%. At the same time, the vitality was severely damaged, and the Shenzhen Stock Exchange Index continued to plummet until the stock price reached 164 points on November 23 before it stopped falling and rebounded.

Liu Hongru was the first chairman of the China Securities Regulatory Commission. At the end of 2000, this is how he recalled the early days of the stock market. After February 1992, under the instruction of the State Council, the Restructuring Commission and relevant ministries and commissions formulated 13 supporting regulations for the joint-stock pilot system. Subsequently, joint-stock companies in various places developed rapidly, and a new round of stock fever emerged. On August 11 of that year, the "August 10 Incident" occurred in Shenzhen. The State Council responded urgently and decided to establish a specialized securities regulatory agency. This resulted in the establishment of the State Council Securities Commission, composed of 13 ministries and commissions, and the establishment of the China Securities Regulatory Commission. Responsible for daily supervision and decision execution.

At that time, Zhu Rongji, who was the Vice Premier of the State Council, approached Liu Hongru and announced his decision to appoint him as chairman of the China Securities Regulatory Commission. In October, Liu Hongru took office and began the work of establishing the China Securities Regulatory Commission. If it is the "8·10 Incident" that gave birth to the China Securities Regulatory Commission, then it can be said that it is the strong yearning for wealth among investors that has promoted the maturity and growth of China's capital market, which undoubtedly contains many factors. The hard work and sweat of many investors deserve our love and treasure. The stock market is sluggish and investors are suffering heavy losses. This should never be the "normal" of the stock market.

Yuanye trading suspension incident

Shenzhen Yuanye Industrial Co., Ltd. is one of the earliest listed companies in Shenzhen. Due to serious problems such as false capital investment, false capital verification certificates provided by accounting firms, out-of-control management, and confusing accounts. On July 7, the Shenzhen Stock Exchange announced that trading of Yuanye stocks would be suspended. This is the first stock to be suspended from trading in China's securities market. On September 5, Yuanye Company held an extraordinary general meeting of shareholders and decided to change its name to Shenzhen Century Star Source Co., Ltd. Trading resumed on January 3, 1994.

August bailout

In late July 1994, the Shanghai Composite Index was 335 points, and the Shenzhen Composite Index had fallen below the 100-point base, at 96 points; the transaction amount in the two cities was only 6 billion. On July 30, the China Securities Regulatory Commission issued an announcement clarifying that except for issued and unlisted stocks, the issuance and listing of all new stocks will be suspended during the year. Moreover, the issuance and listing of companies that have published prospectus announcements in newspapers have also been postponed. After the introduction of this measure, the market response was very enthusiastic. After August, the Shanghai and Shenzhen stock markets rebounded strongly, and the August rescue came from this.

Baoyan Crisis

On September 30, 1993, Shenzhen Baoan (Group) Shanghai Company reported and announced to the China Securities Regulatory Commission, Shanghai Stock Exchange, etc., stating that it had held the shares issued by Yanzhong Industrial More than 5% of the outstanding common stock. This is the first acquisition case in China's securities market.

The "327" Treasury Bond Futures Incident

On February 23, 1995, stimulated by factors such as the issuance of new bonds and value-preserving interest discounts, coupled with illegal joint operations by Wanguo Securities, after positions exceeding the limit , a large number of selling orders suppressed the price, causing great chaos in the market; about 10 minutes before the market closed, a huge amount of selling orders suppressed the price in a straight line, causing the "327" variety to turn from a sudden increase of 3 yuan to a decrease of 0.71 yuan. However, after the market closed, the Shanghai Stock Exchange Declare the last time transaction to be invalid and cancelled. The China Securities Regulatory Commission issued an emergency notice on May 17, 1995, announcing the suspension of the treasury bond futures trading pilot.

Changhong Incident

On August 21, 1995, some investors discovered that the bonus shares given out by the Sichuan Changhong legal person share transfer part could be sold. More investors who did not know the inside story gave up the transfer. He suffered huge losses due to qualifications and the reaction was very strong. The China Securities Regulatory Commission immediately stopped the circulation of bonus shares and Changhong's stock was suspended from trading. After investigation, it was found that this was an incident that deliberately harmed the rights and interests of investors: the Shanghai Stock Exchange illegally approved Changhong's transfer of bonus shares for listing; the lead underwriter, China Economic Development Corporation, and the deputy lead underwriter, Shanghai Finance Securities Company, wantonly sold the bonus shares obtained from the underwriting and transfer to make profits; Changhong Company also committed violations. After more than two months of investigation and handling by the China Securities Regulatory Commission, Changhong stock resumed trading.

Qiong Minyuan Incident

On January 22, 1997, Qiong Minyuan’s 1996 annual report took the lead in making a “dazzling debut”: from junk stocks to “blue chip stocks” sought after by investors , coupled with the 10-for-3 theme, replaced Shenzhen Development Bank as the leader in the strengthening of the Shenzhen market. Its stock price was like a kite with its string broken, rising from 2.08 yuan on April 1, 1996 to 26.18 yuan in January 1997, an increase of 16 times in less than a year! The sudden change in Qiong Minyuan's performance caused doubts among management and investors. On April 29, 1998, after an investigation lasting more than a year, an investigation team composed of relevant departments announced that the contents of Qiong Minyuan's 1996 annual report were seriously inaccurate. In November 1998, the Beijing No. 1 Intermediate People's Court made a first-instance verdict on the "Qiong Minyuan Case": Ma Yuhe, the former chairman of Qiong Minyuan, was sentenced to three years in prison for providing false financial accounting reports; Ban Wenzhao, an accountant employed by the company, was also sentenced to two years in prison with a two-year suspended sentence on the same charge. It is reported that this is the first case to be sentenced using securities crime provisions after the implementation of the new criminal law in October 1997. While investigating and handling the case, the regulatory authorities started the restructuring of Qiong Minyuan.

Hongguang Incident

Hongguang Industrial went public through fraud on June 6, 1997, and continued to defraud after listing: first, it fabricated false profits to obtain listing qualifications; second, Under-reporting losses and deceiving investors; third, concealing major matters; fourth, changing the investment direction of raised funds without disclosure. In this regard, the China Securities Regulatory Commission launched a lawsuit against the former chairman, former general manager, former deputy finance minister and Hongguang Company, as well as related accounting firms, law firms, asset appraiser firms and listing recommenders and other intermediaries. The organization and responsible personnel were punished, and the main person responsible for the Hongguang incident was handed over to the judicial authorities for processing.

The continuous emergence of the above-mentioned major events has caused a lot of discussion inside and outside the securities industry. Some people are confused and others are worried. In particular, the "8.10" incident, as a major event that occurred in the early days of China's stock market, had a profound impact on the development of China's securities market. After the "8.10" crisis, the State Council immediately decided to establish a specialized securities regulatory agency. At a critical moment for the direction of China's securities market, on December 19, 1995, Comrade Zhu Rongji, who had been paying attention to the growth process of China's securities market, delivered an important speech that profoundly affected the future direction of the securities market during his inspection of the Shanghai Stock Exchange, proposing the "legal system" ", supervision, self-discipline, standardization" eight-character policy. The "Eight-Character Policy" has become the guiding principle for the development of China's securities market and has had a significant impact on the development of China's securities market.