The China Securities Regulatory Commission (CSRC) have started investigation
into the fund misappropriation issues of 17 listed companies.
The 17 companies have failed to recover the 9.2 billion yuan (about 1.15
billion U.S. dollars) of debt by their controlling shareholders before the
deadline, the end of 2006, a spokesman of the CSRC said here on Sunday.
The companies include Sanjiu Medical & Pharmaceutical Co., China Textile
Machinery Co. and Hebei Baoshuo Co..
Those who misappropriated funds in these companies will be prosecuted under
the law, according to the spokesman.
Thirty six companies failed to meet the deadline, involving a total of 14.6
billion yuan of misappropriated funds. However, the other 19 companies have come
out with a plan to recover the money, escaping the investigation.
The CSRC issued an ultimatum to listed companies in October 2005, requiring
them to recover misappropriated funds by the end of 2006.
Last year, 402 companies listed on the Shanghai and Shenzhen bourses
recovered 33.57 billion yuan misappropriated by their controlling shareholders.
The recover campaign was aimed to improve the quality of the country's 1,400
listed companies and safeguard the interests of shareholders.
The misappropriation of large sums by controlling shareholders has been a
major problem afflicting China's burgeoning stock markets.