China's securities regulator has vowed to better protect investors after naming and shaming two listed companies for misappropriating capital, Tuesday's China Securities Journal has reported.
Fan Fuchun, vice chairman of the China Securities Regulatory Commission(CSRC), said on Monday that the CSRC would intensify investigations into capital misappropriation by large shareholders.
Fan said two companies -- the Shenzhen-listed Zoje Sewing Machine Co., Ltd and the Shanghai-listed Shandong Jiufa Edible Fungus Co., Ltd -- had been referred to the police for further investigation into alleged misappropriation.
Chairman and second largest shareholder of Zhejiang-based Zoje, Cai Kaijian, was alleged to have transferred more than 500 million yuan (72.7 million U.S. dollars) from January 2006 to February 2008 from the listed firm into the parent group without authorization from regulators.
In the second case, Jiang Shaoqing, chairman of Jiufa, was accused of transferring more than 600 million yuan from the company into accounts of the parent company, Jiufa Group.
Fan urged the executives and controlling shareholders of listed companies to operate according to laws and regulations and prevent other offences, including providing false records and insider trading.
The commission is to host special seminars and training sessions for the board members and executives of listed companies and called on the country's 1,600-plus listed companies to step up self-regulation.
The securities watchdog has taken a series of measures, including issuing draft rules on compliance management of securities firms and tightening rules on listed companies' management incentives, to better regulate the market, which has seen the benchmark Shanghai Composite Index fall more than 54 percent from its peak in October last year.
(Xinhua News Agency June 24, 2008)
