(Yicai) April 17 -- Shares of Soochow Securities fell after the China Securities Regulatory Commission launched an investigation into the company for its business as a private placement sponsor.

Soochow Securities [SHA: 601555] was trading down 4.3 percent at CNY6.23 (86 US cents) as of lunch break in Shanghai today.

The CSRC filed a case against Soochow Securities on April 8 for being careless and irresponsible as a sponsor during the private placements of various listed companies, including Zixin Pharmaceutical Industrial, the Suzhou-based broker announced yesterday.

The company is operating normally, Soochow Securities noted, adding that it will actively cooperate with the CSRC's investigation and fulfill its information disclosure obligation with strict compliance with regulatory requirements.

According to an earlier punishment notice issued by Zixin, there were false records in the company's annual reports between 2014 and 2017 when Soochow Securities was its sponsor for the non-public issuance of shares.

Soochow Securities was responsible for Zixin’s due diligence recommendations, supervision information disclosure obligations, and other tasks. False records were found in every Zixin annual report in those four years.

Zixin, known as 'the king of panax ginseng of northeast China,' delisted from the Shenzhen bourse on Aug. 4 last year due to omission and false records in its annual earnings statements between 2013 and 2021.

Haitong Securities and Citic Securities announced on April 12 that the CSRC had filed cases against them for allegedly illegally transferring a listed company's non-public shares.

Editor: Futura Costaglione