According to the "Shanghai Securities News", prosecutors in Chengdu, Sichuan province, have filed a lawsuit against the board of directors and three other senior managers of a local listed firm for fraud during the firm's initial public offering. Hongguang Industrial officials were accused of reporting more than one million yuan in nonexistent profits so as to get approval for stock issues while they well aware that Hongguang was loosing money.

The Chengdu Intermediate People's Court is dealing with the case.

According to lawyers, the case is of great significance because it is the first time the management of a listed firm are being prosecuted for stock market fraud.

The Hongguang company was founded in 1958 and became a Stock Holding Company in 1993. It was listed on the Shanghai Stock Exchange in June 1997.

The Company's main products include electronic components and broadcasting equipment. The Company produced China's first color kinescope.