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QINGDAO TODAY
在线翻译:
szdaily -> Markets -> 
Exchanges issue new delisting rules
    2018-11-19  08:53    Shenzhen Daily

THE Shanghai and Shenzhen stock exchanges have published new rules with powers to delist companies which have committed serious public safety violations, with the Shenzhen Stock Exchange saying it has begun the process of delisting vaccine maker Changsheng Bio-Technology.

The Shanghai and Shenzhen stock exchanges late Friday posted separate statements on their websites detailing the rules, saying the move would improve market compliance and enhance the quality of listed companies.

Changsheng was found in July to have falsified data and sold ineffective vaccines, sparking public outrage and prompting the Shenzhen Stock Exchange to slap it with a “special treatment” risk alert, which is a step toward delisting. It has also been ordered to pay 9.1 billion yuan (US$1.31 billion) in fines.

Under the new rules, the Shenzhen Stock Exchange said it has started delisting proceedings against Changsheng. The company’s shares surged last week, which the exchange said indicated speculative activity.

China has previously delisted firms for breaching disclosure rules. In 2016, the Shanghai Stock Exchange canceled the listing of Zhuhai Boyuan Investment for breach of disclosure rules.

The securities regulator has announced a number of measures this year to further improve the health of the stock market, including a pledge to “resolutely implement delisting rules.” It has been pressing stock exchanges to push harder for the delisting of companies guilty of major violations, such as giving fraudulent information during their listing or providing inaccurate disclosures, as well as companies with poor financial performance.

More than 40 domestically listed companies have received delisting warnings this year for reasons ranging from accounting issues to business failure, already nearing last year’s 48, official data have shown.

Kaidi Ecological and Environmental Technology Co. is among those to receive delisting warnings. The firm said in late June that its auditor issued a Disclaimer of Opinion report on its 2017 financial results, after its parent defaulted on a local bond interest payment.

Companies receiving such warnings are placed on a “*special treatment” list that is subject to trading restrictions on their shares. Their stocks are tagged “*ST” as a risk reminder to investors. The companies are also required to file a public statement to explain why they receive regulatory warnings.

At present, 82 companies out of more than 3,600 companies listed in Shanghai and Shenzhen are on the “*ST” list.

The China Securities Regulatory Commission, the nation’s securities watchdog, first created the “special treatment” category for ailing companies in 1998. The daily trading limit for “ST” stocks are 5 percent compared with 10 percent for normal counters. (SD-Agencies)

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