CHINA’S securities regulator said Friday it will force Dandong Xintai Electric Co. to delist for initial public offering (IPO) fraud, the first company to be removed from the Chinese stock market due to issues over IPO disclosure.

    In a move to clean up the market, the China Securities Regulatory Commission (CSRC) has fined and reprimanded 17 current and former officials in Dandong Xintai for forging financial data for their IPO in 2014, the CSRC said in a statement Friday.

    “The CSRC will continue to crack down on violations in the securities market to protect investors’ interests,” it said.

    Zhang Xiaojun, a CSRC spokesman, told a news conference Friday the regulator would continue its zero tolerance of financial fraud and the violation of information disclosure rules by listed companies.

    On Friday, Dandong Xintai’s chairman Wen Deyi said his company would consider applying for bankruptcy, as the group owes debt of 626 million yuan, according to the 21st Century Business Herald newspaper.

    The CSRC also fined and confiscated underwriting fees of Industrial Securities Co., one of China’s major brokerages and underwriter for Dandong Xintai’s IPO.

    Industrial Securities has set aside 550 million yuan (US$82.24 million) to compensate potential losses by retail investors who bought into Dandong Xintai’s share offering, the brokerage said in June.

    The Shenzhen Stock Exchange, where Dandong Xintai is listed, said it will guide the company through the delisting process.

    Share trade of Dandong Xintai’s will resume Tuesday and continue until Aug. 23, when trading will be suspended for the exchange to implement the delisting process.

    Dandong Xintai was found guilty of fabricating financial information in its IPO application, including inflating amount of receivables, after the securities regulator launched an investigation against it a year ago.

    The company, from northeastern Liaoning Province, debuted on the NASDAQ-style ChiNext board of the Shenzhen exchange in 2014, raising 350 million yuan.

    The delisting follows the exit of Zhuhai Boyuan Investment Ltd. from the stock market in May over violation of information disclosure rules.

    The securities regulator unveiled stricter delisting rules in 2014 in an effort to restore investors’ confidence and eliminate errant firms.

    (SD-Agencies)