BIZCHINA> News
|
BIZCHINA> News
|
|
Related
Regulation proposed to ban listed companies from speculative stock sales
(Shanghai Daily)
Updated: 2007-03-16 10:53 China will soon issue rules to ban mainland-listed companies from using stock-sale proceeds to invest in initial public offerings (IPOs).
The proposed regulation has scuttled a plan by Financial Street Holding Co to invest capital in new stock subscriptions using capital raised earlier, the Shenzhen-listed firm said in an exchange filing on Wednesday. Public firms will also be prohibited from investing the money they raise from stocks, convertible bonds and upcoming financial derivatives, according to the statement. The funds can be used only as originally planned, such as replenishing working capital to focus on the firms' core businesses, the statement said. A spokesman for the China Securities Regulatory Commission declined to comment on the issue Thursday. China's benchmark Shanghai Composite Index soared 130 percent last year and continues to rise on improved market fundamentals and restored investor confidence. Domestic citizens have been diverting bank savings to securities investments in pursuit of higher returns. Many invest in new stocks as mainland firms usually feature staggering trading debuts amid abundant liquidity. So far this year, more than 20 listed companies have used 10 billion yuan (US$1.29 billion) from their stock-sale proceeds to subscribe to IPOs, the Securities Times reported Thursday, citing its own calculation. Chinese authorities are preparing to urge listed firms to beef up information disclosures and adopt new accounting standards as part of efforts to enhance corporate governance. (For more biz stories, please visit Industries)
|
