IN an effort to protect shareholders' interests, listed companies involved in China property deals will soon be made more accountable for their transactions. A Hongkong Stock Exchange source said the move had been prompted by the volatility in China's fledgling property markets and the lack of clear rules governing transfer of land use. Greater disclosure would be required, allowing investors to take a closer look at the property projects. The listing division is applying stringent procedures to check on some mainland asset injections and new listing plans. The growing concern comes as more listed companies take on property projects in various parts of China and in the light of increasing signs of a market slump. Some investments amount to several billion dollars and represent substantial portions of company property portfolios. The exchange is concerned that in many aspects the rules on property development and investment in China are very different from those in Hongkong. ''Market pitfalls are not what the exchange worries about. While not wanting to interfere with any investment plans, it must ensure that adequate information is provided to make investors fully aware of any risks,'' the source said. In the case of a listing application, the company would be required to describe in its prospectus the procedures for obtaining land-use rights and details of Chinese laws regarding the grant and termination of those rights. The exchange is also looking into land registrations, taxation and the procedures for arbitration in case of a dispute in the transfer of land-use rights. An official with a locally listed group complained that in some circumstances the checking of legal papers that did not involve valuation was simply red tape. But Mr David Cheung, director at the mainland department of Vigers Property Consultant, said the cautious attitude of the exchange was understandable and necessary. The fact that more companies are investing farther north, in cities such as Dalian, Qingdao and Nanjing - where property rules were not stringent - had presented the exchange with additional difficulties, he said. The exchange had been asking for more information on land valuation, development and resettlement costs, and sometimes even the legal documents issued by Chinese authorities, Mr Cheung said. Given the greater expertise and knowledge required for evaluating mainland properties, only about three Hongkong-based international surveyor firms are actively involved in Chinese projects. Mr Cheung said that most of the time the stock exchange would have to rely on valuation reports by these firms. The stock exchange is understood to have recently received a listing application from a particular company mainly involved in property development and investment in Hongkong. After observing the huge surplus arising from the revaluation of the company's property interests in China, the exchange insisted on full disclosure of acquisition costs and the vendors of the mainland properties in the prospectus. The exchange believed that identities of the vendors could help reveal whether there were any related parties involved. Meanwhile, Peregrine Capital director Ken Cheung Kwok-wah said that mainland projects were larger than Hongkong's and took longer to complete. He said the exchange had also kept an eye on how Hongkong developers split projects into different development stages and ensured their completion.