China cracks down on false disclosures by listed companies

Securities regulators will take strong measures against the disclosure of false information by listed companies as part of efforts to strengthen monitoring efforts.

“The China Securities Regulatory Commission (CSRC) will mete out punishments to listed companies found to be involved in accounting fraud and the concealment of important information, as well as intermediaries who fail to exercise their duties,” Yao Gang, vice chairman of the CSRC, said on Sunday.

The information released by listed firms and duties performed by intermediaries are closely linked with the interests and benefits of investors, he said.

The CSRC will help investors obtain compensation through legal procedures for losses caused by false disclosures. Other serious violations, such as fraudulent initial public offerings (IPOs), will also result in severe punishments, Yao added.

China will further improve its IPO mechanism and contract administrative procedures, he said.

The stock market has experienced major turbulence this year, with the benchmark Shanghai Composite Index dipping to a fresh low since early 2009 at the end of November. The index has rebounded in recent weeks.

Xinhua