To: georgevista who wrote (2081 ) 4/11/2001 8:06:06 AM From: StockDung Respond to of 2413 China to delist firms that report fraudulent data SHANGHAI, April 11 (Reuters) - China's stock market regulator has stepped up its crackdown on market irregularities by saying it will draft guidelines for delisting firms with fraudulent books or those who took part in illegal activities. Such firms can be delisted under the existing Company Law, as can companies that post three years of losses. But China has yet to kick a single firm off its decade-old exchanges due to murky implementation rules and worries of spooking investors. However, since late last year, Beijing has appeared determined to clean up share markets plagued by price-rigging, fraud and a lack of transparency. Analysts said it was preparing markets to be opened gradually to foreign investors. "Beijing plans to draft rules for implementing the delisting of companies that falsify financial statements or are involved in big illegal activities," the Shanghai Securities News said on Wednesday quoting unidentified market regulators. "The planned delisting rules will also apply to companies whose share capital and shareholding structure no long comply with requirements stated in the Company Law," the official newspaper said. It gave no more details. Wednesday's report follows guidelines issued by the market watchdog, China Securities Regulatory Commission (CSRC), in February and March to help implement the delisting of firms continuously in the red. The CSRC said it would delist companies that post three or more years of losses if they do not turnaround within six months to a year. Those that forecast a fourth year of loss in 2000 would be kicked off if they fail to deliver a workable turnaround plan by the end of April. Analysts said Wednesday's move could affect dozens of companies that have been publicly criticised or fined by market regulators for falsifying financial reports to gain a stock listing. The most notorious is indebted retailer Zhengzhou Baiwen, which the CSRC said it was investigating. 07:04 04-11-01