Top officials from the China Securities Regulatory Commission (CSRC) have pledged to accelerate the improvement of internal management of local listed companies in an effort to further regularize and develop the country's capital market.
The pledge was made by CSRC's Chairman Zhou Xiaochuan and Vice- Chairperson Laura Cha Shih May-lung at a symposium on the control of the country's listed firms.
In the early years of state enterprise reform, the government encouraged state firms to go public by reducing administrative interference in the companies' internal affairs, with little consideration for the interests of the stockholders and the role of the board of directors of the listed companies, said Zhou.
Among the country's over 1,000 listed companies, 35 percent have failed to set up a sound internal control mechanism, with their board of directors and the stockholders' conference playing little part, according to the official.
Some of the listed firms have frequently been engaged in falsification and nonstandard operations, resulting in damage to the interests of small investors, he noted.
Laura Cha Shih May-lung, who was a former vice-chairwoman of Hong Kong's Securities and Futures Commission (SFC), said the CSRC needs to do many things to improve local listed companies. Local companies will be asked to establish a sound internal control mechanism prior to their floating, she said.
The CSRC has drafted the "basic principles and standards on the control of listed companies in China," she said.
(People's Daily 05/31/2001)
