Chinese media applauded the Chinese Securities Regulatory Commission for giving out on Friday the nation's biggest penalty ticket in almost a decade to a major financial service company.

The Shenzhen-based Ping An Securities Co was fined 76.65 million yuan ($12.5 million) for sponsoring in 2011 the initial public offering of Wanfu Biotechnology (Hunan) Agricultural Development Ltd, a company that has been exposed for having hugely exaggerated its business results.

The size of the fine was three times Ping An Securities' earnings from sponsoring the Wanfu IPO.

Also as part of the penalty, the commission banned the company, the securities arm of China's second-largest insurer Ping An Insurance Group, from acting as an IPO sponsor for three months.

Ping An Securities' two representatives in the Wanfu IPO, along with three other senior executives involved in the case, were each fined 300,000 yuan and barred from working in financial services for the rest of their lives.

To amend relations with investors, Ping An Securities announced a 300 million yuan special fund to compensate for losses from the false information.

In the meantime, Wanfu also earned a penalty of 300,000 yuan for having falsified as much as some 110 million yuan of net profit in its financial reports for the three years preceding its IPO.

There were more falsifications in later financial reports from the company, a rice processor that Chinese media reported is having a difficulty to even keep running its production line.

Wanfu's former chief executive officer and chief financial officer were both fined 300,000 yuan and were barred from the capital market for the rest of their lives. Both men had already been referred to the public security department on criminal charges, Chinese media reported.

Another 19 people from the company's executive team were ordered to each pay fines ranging from 50,000 yuan to 250,000 yuan.

All the fines, when totted up, are not an insignificant amount. However, one may ask, is it punishment enough? Compared with the amount of non-existent net profit that the company claimed, the amount of proceeds that it must have raised and, worst of all, the damage to the reputation inflicted on China's capital market, the country's existing financial laws and regulations seem somewhat lenient.

One basic problem is that the commission's present penalty system seems to weigh more heavily on individuals rather than on companies and institutions.

When a number of individuals are fined and driven out of the market, the two companies remain unscathed. Wanfu is still listed, although it should not have been listed in the first place. And Ping An Securities' status in the industry continues as before. The three-month ban on its sponsoring business was way too light, according to more than 90 percent of people who took part in a survey on Saturday on ifeng.com, a general news portal.

But the capital market is basically a market for companies and institutions and the commision's job is to first of all regulate companies and institutions, not individuals. The market cannot win over investors' trust if it fails to encourage strong companies and institutions - and here it has failed to do so by being lenient toward a company that had weak and incompetent management.

It is just like a country that cannot excise official corruption if there is a lack of strong law and justice. Bad CEOs, CFOs and financial sponsors and analysts continue to thrive in the market if there is not a system to encourage companies to strive for investor value and integrity.