Narcissus Electric Appliances Co., Ltd, a locally based, A- and B-share-listed company, could become the first company delisted from Shanghai Stock Exchange (SSE). If Narcissus gets the axe Tuesday, it will mark the beginning of the delisting system on the Chinese mainland.
Narcissus is a Shanghai-based electronics company whose products were once popular with local consumers. In 1992, it was transformed into a shareholding company and was listed first on the A-share market in June and then on the B-share market in 1994.
It reported a loss of 24.4 million yuan (US$3 million) in 1996 and has not turned a profit since then.
On April 18, Narcissus issued its annual report for 2000, which indicated that it was in the red for the fourth consecutive year. The report said the company lost 145.7 million yuan (US$17 million) in 2000, bringing total losses to 473.6 million yuan (US$57 million).
The SSE denied the company's application for a grace period on Friday, which puts Narcissus in line to be delisted from the main board of the Chinese mainland on April 24.
General opinion cheered the SSE's decision, and some insiders commented that this was the start of the healthy development of stock exchanges on the Chinese mainland.
"A stock market can develop healthily only on the conditions that poorly performing listed companies are allowed to retreat from the stock exchange," said Li Xianpu, a lawyer specializing in financial issues from AllBright Law Firm.
According to the rules promulgated by the China Securities Regulatory Commission (CSRC), shares of delisted companies will be traded no longer at the stock exchange, but at a specially designated securities company through counter-trading services.
(China Daily 04/23/2001)
