The mainland's securities regulator has tightened the approval process for companies planning to relist their B shares on the Hong Kong market, in a U-turn on policies aimed at phasing out the moribund B-share market.
Developer China Vanke and Livzon Pharmaceutical faced review by the China Securities Regulatory Commission and were unlikely to receive the go-ahead soon to convert their stocks into H shares, sources said.
The regulator had stepped up efforts to protect retail investors' interests and make sure that the companies' operations were in compliance with government policies, they said.
In 2002, the CSRC, in an attempt to help firms escape the illiquid B-share market, encouraged them to move their shares to the Hong Kong exchange.
It was believed that about 10 companies would follow in the footsteps of China International Marine Container this year.
CIMC became the first mainland firm to relist its B shares in Hong Kong at the end of last year.
The CSRC has yet to endorse a second application.
Beijing created the hard-currency B-share market in 1992 to help state-owned firms raise foreign currencies.
B shares are denominated in US dollars on the Shanghai exchange and in Hong Kong dollars in Shenzhen.
The efforts turned out to be a failure as domestic and foreign investors shunned the B shares, with no new offerings launched since 2000.
Sources said the CSRC had received complaints that some relisting plans were unfair.
CIMC paid investors HK$9.83 a share if they were unwilling to relist their B shares. Analysts said it was not enough, based on the company's fundamentals.