Gui Minjie, vice-chairman of the China Securities Regulatory
Commission (CSRC), yesterday laid down the main regulatory thrusts
for the development of the stock market.
Speaking at the "OECD-China Policy Dialogue on Corporate
Governance" in Shanghai, Gui said: "We will take more active
measures to supervise listed company's management in view of
China's specific situation. There still exist many problems in the
stock market, such as the abuse of power by controlling
shareholders and falsified or belated disclosure of
market-sensitive information."
He also said the CSRC will continue to promote stock option
schemes as an incentive to corporate executives. Such incentives,
said Gui, can help strengthen the "foundation" of corporate
management.
In addition, he said, the CSRC will seek to incorporate the
experience of effective management by publicly listed companies
into the regulatory framework.
"Judicial remedy and legal procedures need to be improved, with
strong emphasis on the responsibility of directors, management and
controlling shareholders," said Gui.
The CSRC will actively promote the judicial remedy mechanism,
with reference to international practices, to protect shareholder
rights and interests.
Gui said the CSRC will fine-tune the merger and acquisition
regulations as well. A well-established and active corporate
control system, he said, can help promote proper management in the
best interests of shareholders.
The CSRC is trying for a major management restructuring at
listed companies, with the aim of protecting shareholder
interests.
Gui said the CSRC will try to attract more institutional
investors, including pension funds, insurance companies and
qualified foreign institutional investors, who can help monitor the
performance of publicly traded companies in which they invest. "I
hope these institutional investors will vote with their hands and
not with their feet," he said.
(China Daily March 30, 2007)