Last year, 402 companies listed on the Shanghai and Shenzhen bourses recovered 33.57 billion yuan (US$4.2 billion) of debt owed by their controlling shareholders, according to announcements by the two exchanges on Thursday.

The announcements said 36 listed companies are yet to recoup 14.6 billion yuan from their controlling shareholders, including 22 companies that had partially retrieved misappropriated funds.

The two bourses urged the 36 companies to explain why they failed to recover all the misappropriated funds and report measures they had taken to hold those responsible to account.

More work should be done to improve the quality of listed companies and secure the sound development of the capital markets, sources with the Shanghai and Shenzhen stock exchanges said.

The China Securities Regulatory Commission issued an ultimatum to listed companies, requiring them to recover misappropriated funds from controlling shareholders by the end of 2006 and warning those who failed to meet the deadline would be banned from re-financing.

The campaign, which was started in November 2005 by the State Council, China's cabinet, 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.