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Original title: After every hot comment | The principle of integrity and due diligence cannot be lost when the independent directors of many companies are fined
Every special commentator Cao Zhongming
a few days ago,*ST Setia(Human Rights Protection) issued an announcement stating that the company received an advance notice of administrative punishment from the Fujian Securities Regulatory Bureau. Because the company implemented financial fraud for two consecutive years in 2018 and 2019, the regulatory authority plans to fine the listed company 1.6 million yuan, and plans to fine 19 people. Those responsible were fined a total of 10.4 million yuan. It is worth noting that the five independent directors at the time were to be fined a total of 1.84 million yuan. I personally think that, as an independent director of a listed company, the principles of integrity and diligence cannot be lost.
It is no news that independent directors of listed companies are fined.For example, since March this year, there have been*ST Guangzhu(rights protection) three independent directors, andST KoichiSix of the three independent directors of (rights protection) were fined 500,000 yuan by the China Securities Regulatory Commission. In addition to the five independent directors of *ST Setia announced this time, more than ten independent directors have been fined.
The punishment of these independent directors has both commonalities and differences. For example, the reason why these independent directors were punished was because they did not perform their duties diligently. In addition, the companies in which these independent directors work are either “hats” or “stars” and “hats”, which are basically “problem” companies. In terms of the amount of fines, most of them were fined 500,000 yuan.
The difference is that *ST Guangzhu’s three independent directors were punished because they failed to verify and urge the listed company to disclose the relevant related party transactions in a timely manner; ST Guangyi was still in the first half of 2020 because the listed company has announced that there is capital occupation. Signed on the report; *ST Setia’s independent director was fined because he signed to ensure the authenticity, accuracy and completeness of the 2018 annual report or 2019 annual report without verification and confirmation. It should be pointed out that an independent director of *ST Shida, one week after taking office, the listed company disclosed the annual report, and as a result, he was fined 500,000 yuan for ensuring the authenticity of the annual report. Having been in office for such a short period of time, he has the courage to “guarantee”, and it is entirely his own fault to be punished.
The first-instance judgment of Kangmei Pharmaceutical’s financial fraud case, the first securities class action case, made independent directors a “high-risk” occupation, and the case also triggered a wave of resignations of independent directors of listed companies. In fact, just like the resignation of other executives in listed companies, it is normal for independent directors to resign, and the emergence of a wave of resignations proves that many independent directors are aware of the high risks of taking office.
In fact, the defect of the current independent director system is the root of the problem. On the one hand, the nomination and election of independent directors of listed companies is basically decided by the major shareholders or actual controllers. Although the “Rules for Independent Directors of Listed Companies” (hereinafter referred to as the “Rules”) implemented this year stipulates that “shareholders who individually or jointly hold more than 1% of the issued shares of a listed company may propose candidates for independent directors”, due to the need to go through The election procedure of the general meeting of shareholders, and whether the independent director holds office or not, are actually still in the hands of major shareholders and actual controllers. On the other hand, in addition to the functions and powers conferred on directors by the Company Law and other relevant laws and regulations, the Rules also require listed companies to grant independent directors a number of special powers. restricted in many ways.
The shortcomings of the system eventually led to the fact that there are not many independent directors who are truly independent. Instead, “vases” of independent directors and “independent directors are not independent” have become the norm. Therefore, the above-mentioned more than ten independent directors were punished, in a sense, not only because of their lack of diligence and due diligence, but also due to institutional reasons.
Independent directors have the obligation of integrity and diligence to listed companies and all shareholders, which is the basis for the existence of the independent director system, and it is also the code of conduct that independent directors should abide by. Otherwise, the establishment of an independent director system would be meaningless. Since March, more than a dozen independent directors have been punished, and the independent directors of Kangmei Pharmaceutical have received “astronomical” fines, which are essentially closely related to the independent directors’ duty of integrity and diligence.
Only when independent directors abide by the principles of integrity and diligence can they safeguard the overall interests of listed companies and pay more attention to the legal rights and interests of small and medium investors from being damaged. For independent directors who abide by the obligations of good faith and diligence, the “Several Provisions on Trial of Civil Compensation Cases for Misrepresentation Infringement in the Securities Market” issued by the Supreme People’s Court in January also listed specific exemption clauses, which also added to the independence of independent directors. system guarantee. This will not only help the independent directors perform their duties, but also help to avoid repeating the tragedy of the independent directors of listed companies such as *ST Shida being fined.
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Responsible editor: He Songlin