The clampdown on price rigging and other irregularities in the
stock market will be intensified, the head of the market watchdog
said yesterday.
Speaking at the first China Listed Companies Seminar, Shang
Fulin said that price rigging activities include spreading rumors
about asset injections and back-door listings to jack up share
prices.
"Listed companies, which have already become a main engine of
economic growth, need to increase transparency in their business
activities, including restructuring and mergers and acquisitions,"
the chairman of the China Securities Regulatory Commission (CSRC)
said.
The CSRC recently penalized Hangxiao Steel Structure for
violating information-disclosure rules. Three people have been
detained for their alleged roles in insider trading in shares of
the construction company.
The securities regulator also fined the company 400,000 yuan
(US$52,600) for failing to abide by information-disclosure rules,
the first such case since rules on information release by listed
companies took effect on January 30.
The Shanghai Stock Exchange announced it will suspend the
accounts of investors involved in irregular trading.
Shang also spoke of plans for healthy market development. "We
will continue to promote the establishment of new markets for
different classes of companies, including a second board for small-
and medium-sized companies," he said.
Shang encouraged listed companies to induct foreign strategic
investors to be more competitive on the international market.
By the end of 2006, the total capitalization of the 1,474 listed
companies reached 24.5 trillion yuan (US$3.2 trillion) with
accumulated net profits hitting 378.1 billion yuan (US$50 billion)
that year.
(China Daily June 22, 2007)