The China Securities and Regulatory Commission (CSRC), the mainland's chief financial regulator, has imposed a 500,000 yuan (about HK$465,500) fine on Shanghai-listed Bohai Group for fabricating an interim report, published in July. The regulator fined the Shandong-based trading and real estate company for a report that falsely inflated its assets, contrary to Chinese accounting rules. The huge fine marks a new phase in the development of the CSRC, which is seeking to bolster its role as a market watchdog and shed its reputation for tardiness in punishing companies that break the rules. Bohai included the valuation of a piece of land for a yet-to-be-approved project in its report and included assets of an unregistered joint venture in its accounts, the CSRC said. The regulator ordered Bohai to redraw its interim accounts in accordance with proper accounting rules. The adjusted accounts would have to be published in the China Securities News and the Shanghai Securities News within 30 days, it said. The CSRC's tough stance was welcomed by analysts and dealers who said it would improve the credibility of the mainland's markets. Haitong Securities research analyst Yu Jianguo said: 'It is healthy to see the CSRC pouring cold water over companies that think they can get away with such things.' Shenyin & Wanguo Securities research centre manager Zhuang Dongchen said: 'The CSRC seems to be waking up to the fact it has to act fast to punish companies for malpractices if it wants to be taken seriously. This is a good sign.' In the past five weeks, the commission has publicly censured and fined three listed companies and a brokerage for flouting securities rules. Until recently, a lack of manpower and other constraints meant the CSRC could take between six and 24 months to investigate simple allegations. Indications that a change was underway at the CSRC emerged last month when it rebuked and fined Shengli Oilfield Daming Shareholding Group one million yuan for fabricating financial documents to improve its chances of gaining approval to list in June this year. Huaxia Securities, one of China's biggest broking houses, was fined two million yuan for its role in the affair. On Saturday, the CSRC acted with uncharacteristic swiftness when it censured Zhejiang Phoenix Chemical for an illegal merger with an unlisted company. The merger with Kangbaier, a pharmaceutical manufacturer, was passed by shareholders a week ago. The regulator ordered the two companies to immediately suspend the merger because it went against the rules, which forbid mergers between listed and unlisted companies. Analysts said the CSRC should come down harder and more quickly on those misleading shareholders in their financial reports. Mr Zhuang said: 'If one looks at interim reports carefully, one can detect many irregular practices. Profit forecasts of many companies were way out of line with reality. This is fraudulent behaviour and should be dealt with severely by the authorities.'