Center

Listed companies to surrender misappropriated fund

(Xinhua)
Updated: 2006-12-02 14:02

The China Securities Regulatory Commission (CSRC) has issued an ultimatum to 86 listed companies, requiring them to surrender misappropriated funds totaling 23.34 billion yuan (2.92 billion U.S. dollars) by the end of the year.

The CRSC has suggested the state-owned assets supervision and personnel authorities give administrative punishment managers of state-owned listed companies that fail to meet the deadline.

The commission also warns that criminal offenses will be handed over to the police.

Individuals who misappropriated funds in private companies may risk of losing their personal assets to offset the losses.

The commission said that listed companies would be banned from re-financing unless they repay the misappropriated funds and pass a compulsory one-year check on their credibility.

For companies that have been suspended from trading will have to prove they have improved their corporate governance before their rights are restored.

As of November, 381 companies listed on the Shanghai and Shenzhen stock exchange markets have reimbursed 25.67 billion yuan in misappropriated funds, accounting for 52.38 percent of the total.

The campaign, which was started last November by the State Council, or China's cabinet, aims to improve the quality of the country's 1,300 listed companies and better safeguard the interests of shareholders.

The misappropriation of large amounts of funds of listed companies by their controlling shareholders has been a major issue afflicting China's burgeoning stock markets.