Investors in China High Precision angered by trading suspensions

China High Precision shareholders say opposing decisions by regulators have created confusion

PUBLISHED : Saturday, 25 August, 2012, 12:00am
UPDATED : Saturday, 25 August, 2012, 2:10am

Small investors are upset about on-again, off-again suspensions of trading in shares of China High Precision Automation, a mainland maker of automated industrial instruments.

They blame regulators for failing to co-ordinate their response.

"I bought the shares of the company after the stock exchange approved the resumption of trading on August 3," an investor who did not identify himself said yesterday after a shareholders' meeting voted on replacing the company's auditor.

"But a few weeks later the Securities and Futures Commission suspended it from trading again.

"I do not understand why the SFC and the stock exchange did not communicate with each other and why they didn't work together before deciding if a company should be suspended from trading or not."

Scores of investors attended the meeting that approved the appointment of Pan China to replace former auditor KPMG, which resigned in November after failing to get sufficient information to conduct an audit. High Precision asked for its shares to be suspended in October.

Trading resumed early this month after the company explained it was involved in "state secrets" and could not share certain information with KPMG.

China High Precision had previously appointed Pan China to conduct a special audit. It confirmed the company's financial statement in the first half of last year was "true and fair".

The company makes parts for quartz watches and products that measure temperature and water pressure.

On Wednesday, the SFC suspended trading of China High Precision's shares according to Rule 8, which allows such a suspension if it believes "any materially false, incomplete or misleading information" is contained in any documents or announcements.

Chairman Wong Fun-chung declined to comment on the commission's action, saying "we will issue an announcement according to the listing rules".

A spokeswoman for the Hong Kong Exchanges and Clearing said that while the bourse would not comment on specific cases, it "maintains a close working relationship with the SFC and the two organisations communicate from time to time".

High Precision shares closed at HK$1.24 on Tuesday.