CSRC says responsibility for delisting problematic companies lies with the Shanghai and Shenzhen exchanges

PUBLISHED : Friday, 25 March, 2016, 9:58pm
UPDATED : Friday, 25 March, 2016, 9:58pm

The stock exchanges in Shanghai and Shenzhen would be the ones to delist problematic listed companies under current regulations, the China Securities Regulatory Commission said on Friday.

The South China Morning Post earlier this week reported the CSRC had compiled a blacklist of 30 to 40 troubled firms and had been probing them with the view of pushing for the delisting of unqualified firms.

A CSRC spokesman on Friday said the commission does not have the black list but said it should be the stock exchanges duty to enforce the law related to the delisting of listed companies.

“According to securities law, it should be the stock exchanges who are responsible for carrying out the delisting system,” the CSRC spokesman said on its website.

“All delisting procedures would be carried out according to what the law requires,” the spokesman said.

The CSRC said the Shanghai Stock Exchange and Shenzhen Stock Exchange from October 2014 has amended the delisting regulation.

“It would need to follow all the relevant laws and regulations to determine whether any listed companies should be delisted,” the CSRC spokesman said.

The late 2014 amendment on delisting rules tightened regulation on the delistings requirement and said companies that failed to meet financial and trading standards would face mandatary delisting.

However, only two companies have been forcibly delisted since then, while seven others companies have applied for voluntary delisting.

On Monday, the Shanghai Stock Exchange announced the compulsory delisting of Zhuhai Boyuan Investment. It was the first company to be delisted for breaching information disclosure rules.

The CSRC started investigations into Zhuhai Boyuan on June 17, 2014.

On May 25 last year the company’s shares were suspended from trading.

Prior to the delisting the shares traded with a risk alert for 30 days, the statement said.