CSRC tightens scrutiny of companies

By Wang Yanlin  |   2008-6-25  |     NEWSPAPER EDITION

CHINA will tighten supervision of listed companies to fight insider trading, false information and misuse of funds, said Fan Fuchun, vice chairman of the China Securities Regulatory Commission.

During a recent meeting, Fan demanded senior executives and big shareholders should enhance internal supervision and said the regulator would introduce harsher punishments to better protect investors, according to the commission's Website late on Monday.

Fan also briefed media about alleged fund misappropriations by Zoje Sewing Machine Co Ltd and Shandong Jiufa Edible Fungus Co Ltd.

According to earlier reports, 13 senior executives with Zoje Sewing Machine have been punished after they misappropriated more than 169.8 million yuan (US$24.6 million). And the assets of Shandong Jiufa's biggest shareholder have been frozen after more than 500 million yuan was discovered missing.

Fan said the two cases have been transferred to police for further investigation.

Fan asked listed firms to strengthen training and organize special seminars for their board members, senior managers and accountants to familiarize them with regulations.

His remarks came as China's stock markets continued to plunge, and the regulator issued statements to boost confidence among investors.

Shang Fulin, chairman of the commission, said on Sunday that China will spare no efforts to facilitate the stable growth of the country's capital market.

Li Deshui, former director of the National Bureau of Statistics, said last week that China's overall economic fundamentals were healthy, so recent market tumbles should be a temporary phenomenon.

He said the corrections won't last long and China's markets won't let down mature investors.