China's courts are again accepting cases from investors suing listed companies claiming they had issued false information. This comes four months after consideration of new cases was suspended. In a circular yesterday, the Supreme People's Court opened the way for courts at various levels to accept the cases. But plaintiffs had to have their cases substantiated by investigations carried out by the industry watchdog, the China Securities Regulatory Commission (CSRC), the China News Service reported. The Supreme People's Court said plaintiffs would use the investigation findings as facts for the courts' consideration, but they must be submitted within two years of the investigation results. A few days ago, regulators issued a full set of guidelines on corporate governance to improve the quality of listed companies. They included provision for legal action by minority shareholders whose interests were damaged by directors' failure to disclose enough information or because directors had broken the rules. However, yesterday's circular said courts would accept only alleged cases involving false information disclosure at the moment. Other misbehaviour, such as insider trading and market manipulation, were excluded. Investors can either sue as individuals or launch a class action. People's University Finance Law Research Institute's deputy head Guo Feng saw the resumption of cases as only a transitory measure in the advancement of shareholders' rights. Mr Guo urged the courts to remove the requirement that the CSRC's investigations be a precursor to acceptance of cases as soon as practicable. 'Investors should have the right to sue listed companies. It is unreasonable to subject their civil right to the CSRC's investigations,' he said. However, Mr Guo conceded the decision could be based on the difficulty many investors faced in collecting evidence. 'This will put greater pressure on the CSRC in improving its efficiency in corporate misconduct investigations,' he said, pointing out that certain cases had dragged along for several years in the past. Mr Guo also said investors should be allowed to sue listed companies on grounds other than false representation. 'Investors' confidence in China's securities markets has been severely hurt in the past several years due most notably to false disclosure cases, but other misconduct should also be included in court jurisdictions,' he said. In the past, mainland courts have declined to process lawsuits involving investors suing listed companies which falsified profits. CSRC vice-chairwoman Laura Cha Shih May-lung has expressed her disappointment over the Supreme People's Court's refusal to consider a shareholders' lawsuit against a Shenzhen-listed company, Guangxia (Yinchuan), which topped up profits by a non-existent 745 million yuan (about HK$698 million) and has faked contracts and exports, according to reports.