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CSRC to Crack Down on False Restructuring & Insider Trading
China's securities regulatory authorities will take harsh measures to punish falsified restructuring and insider trading, revealed three senior regulators over the weekend.
The three are Zhou Yingling, vice director of Listing Department under China Securities regulatory Commission (CSRC), Zhou Qinye, chief supervisor from Listing Department of Shanghai Stock Exchange (SSE) and Wang Hong, chief supervisor with Listing Department of Shenzhen Stock Exchange (SZSE)
They detailed some typical problems existing in restructuring plans of a few listed companies. Some listed companies try to link up unrelated enterprises or assets, such as related trading of listed companies before the year end; a few local governments arrange short-gun wedings for listed companies to bail out some unprofitable state-owned enterprises; some institutions make exorbitant profits through asset restructuring; a few listed companies sugar up their financial positions through asset swap of inequal value; and legal disputes resulted from transfer of shares, etc.
According to Zhou Qinye, the related governments are now working on the inaction of new rules for standardizing asset restructuring of listed companies, including Detailed Rules on Annexation and Acquisition, Rules on Disclosure of Equity Ownership that requires the real controller to show their appearance, and Rules for Share Trading on the Exchange that permits comparatively long term suspension of listed companies under restructuring.
Meanwhile, the regulatory departments will set up its regulation of intermediary institutions, advocate improvement of corporate governance structure and deal heavy blow on false restructuring and insider trading.
Deng Yingling warned advanced technologies adopted by CSRC enables it to have a clear picture of asset restructuring. Any illegal activities will be severely punished. Besides, CSRC will mete out severe punishments on these activities in collaboration with the public security and judicial departments to ensure the healthy development of assets of listed companies, he added.
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