Beijing has revoked the licence of an accounting firm that helped a listed company to inflate profit numbers to mislead stock investors. A report in China Securities said the Ministry of Finance had cancelled the business licence of Shenzhen-based Zhongtianqin Accounting Office, which collaborated with disgraced Guangxia (Yinchuan) Industry to detail a fictional paper profit of 745 million yuan (about HK$698 million). This was the most severe punishment authorities have meted out to an accounting firm so far as efforts in recent months to crack down on market irregularities intensify. In addition, the licences of two Zhongtianqin chartered accountants - Liu Jiarong and Xu Linwen - were revoked. '[The government] definitely will not be soft-handed when it comes to illegal and irregular practices by accountants,' the newspaper quoted Assistant Finance Minister Li Yong as saying. 'Those who violate regulations that would constitute a crime will be handed over to the police,' Mr Li said. The China Securities Regulatory Commission (CSRC) would also withdraw Zhongtianqin's permit to deal in securities and futures, and would investigate individuals in the firm for further irregularities, the newspaper said. Zhou Xiaochuan chairs the commission. According to media reports on Wednesday, the commission had reported Guangxia executives, who allegedly inflated earning numbers, to the police for criminal charges. The Guangxia probe, a co-operation between the finance ministry and the CSRC that began last month, found the company posting a 95 per cent increase on earnings in 1999 and last year, using false contracts, export and tax invoices, as well as tax rebate slips. The fabricated figures pushed the stock price to new highs. The stock - which had been suspended - will resume trading on Monday. 'As market irregularities have become more complicated, the biggest offender must therefore be punished severely,' said Yang Qingli, an analyst at Guotai Junan Securities. The China Securities report said the ministry and the CSRC were continuing their probe into Hubei Lihua Accounting Firm. Lihua allegedly helped eight listed companies falsify their earnings figures. To date, individual accountants have been suspended for varying periods for their roles in the fraud and the companies involved have been fined and publicly criticised. In a separate China Securities report, CSRC chief accountant Zhang Weiguo was quoted as saying that there were still many problems in ensuring companies and accountants met disclosure standards. 'We need to raise chartered accountants' standards in professional ethics, independence, objectivity and fairness,' he said.