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China exchange delists first firm over disclosure

China exchange delists first firm over disclosure

SHANGHAI: The Shanghai stock exchange has delisted investment firm Boyuan for providing false information, a statement said, the first time a listed company has been removed under new disclosure rules.

The Shanghai exchange on Monday approved the delisting of Zhuhai Boyuan Investment over “fake” financial information, including inflated assets, revenue and profit, the exchange statement said.

Both domestic and foreign investors have long had concerns over the reliability of Chinese corporate accounts and information after a series of scandals, but Boyuan was the first company struck from the bourse since new disclosure guidelines were introduced in 2014, according to the exchange and media reports.

Financial authorities began investigating Boyuan in 2014 and handed the case over to police in March last year. The company has been suspended from trading on the Shanghai bourse since May.

The last company delisted by the Shanghai exchange was China Erzhong Group (Deyang) Heavy Industries in April 2015, although it was removed because of successive years of losses.

Market watchdog the China Securities Regulatory Commission (CSRC) said in February that it punished 10 companies last year over information disclosure by fining them and confiscating funds — although it only identified one of them.

The securities regulator is seeking to restore investor confidence and improve the quality of listed companies after a market rout last year.

In February, the government dismissed CSRC chief Xiao Gang and replaced him with Liu Shiyu, who previously led the Agricultural Bank of China.

Copyright AFP (Agence France-Presse), 2016

Courtesy : BRecorder



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