SFC Intends To Punish Kay Reed Injured Investors Are Expected To Be Compensated

Recently, *ST Kerry released the notice of "administrative penalty and advance notice of market entry". After a year and a half of the investigation, the CSRC finally made a preliminary investigation into the major litigation of *ST Carey.

The announcement shows that *ST Carey has not disclosed the major lawsuits between Akesu Xincheng Real Estate Development Co., Ltd. and Dezhou bank Dezhou Xicheng sub branch. The securities and Futures Commission has decided to warn *ST Kerry and impose a fine of 600 thousand yuan, and to impose warnings and penalties ranging from $3 to $300 thousand for senior executives of some companies.

According to Wang Zhibin, lawyer of Shanghai Ming Lun law firm, the current announcement is that the SFC will impose a penalty measure on the company's actual controller and some of its executives, not a formal penalty decision. *ST Carrey and the relevant natural persons, in accordance with the SFC's proposed punishment measures, have the right to request hearing, Chen Shu and pleading. After that, the SFC will issue a formal penalty decision.

Wang Zhibin lawyer also said that judging from the fact that the announcement disclosed the violation, *ST Kerry has conceal major litigation and infringed the investor's right to know. The alleged violation is not complicated. Under the fact that the basic facts are clearer, it is expected that *ST's potential to turn over the board through hearing procedures is very small.

As for whether investors can claim compensation, Wang Zhibin lawyer said that investor claims have sufficient legal basis and fact basis. *ST Kerry has been suspected of making false statements. Investors have filed a civil claim proceeding in accordance with the provisions of the 69 law of the Securities Act. In fact, after the investigation of *ST Kerry, the share price has fallen off cliff, and there is a direct causal relationship between the loss of investors and the behavior of *ST Carey's concealment of major litigation.

Regarding the scope of investor claims, Wang Zhibin lawyer said that investors who bought Kay Reed from September 2, 2015 to December 20, 2017 and still held in December 20, 2017 were in line with the initial claims.

In recent years, it is not uncommon for investors to successfully claim compensation from listed companies. According to the securities law and the judicial interpretation of the Supreme People's court, a listed company should bear civil liability for damages caused by the fraudulent conduct of securities such as misrepresentation and other securities fraud. The scope of compensation includes: investment balance, commission, stamp duty and interest loss.