CHINA launched the country’s first class-action lawsuit against a listed firm Friday, targeting Kangmei Pharmaceutical Co., as regulators vowed “zero tolerance” against accounting fraud and other capital markets “tumors.”

The China Securities Investor Service Center, a government-affiliated body, is suing Kangmei on behalf of more than 50 individual investors in a landmark case in China’s capital markets, the China Securities Regulatory Commission (CSRC) said.

Kangmei was engaged in intentional and systematic financial cheating worth 30 billion yuan (US$4.60 billion) between 2016 and 2018, the CSRC said, adding “toxic tumors” in capital markets must be eradicated swiftly and relentlessly.

China introduced the class- action mechanism to capital markets last year as part of efforts to crack down on corporate malfeasance and bolster investor confidence.

Still, the CSRC said Friday that the new class action mechanism would greatly reduce investors’ cost of suing listed companies and help reduce malpractices in China’s capital market. (SD-Agencies)