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Hangxiao Steel Structure probed for illegal disclosure

(China Daily)
Updated: 2007-04-28 14:05

The China Securities Regulatory Commission (CSRC) has confirmed that Hangxiao Steel Structure Co Ltd, a Shanghai-listed construction firm, is involved in a case of illegal information disclosure, and certain people are also suspected of a securities crime, an unnamed official from CSRC said on Friday.

CSRC has handed the suspected securities crime case to the public security bureau, and the securities watchdog is cooperating with overseas law enforcement departments in further investigations, according to the source.

"CSRC has evidence and clues that certain people committed crimes in the company's share trading," CSRC official, who participated in the investigation, said.

He declined to give the number of suspects, but some have been stopped from going abroad.

CSRC also sent a penalty notice on Friday to Hangxiao Steel Structure for its behaviour.

CSRC believes the firm's information disclosure was not timely, and not accurate.

Hangxiao Steel Structure suspended its share trading on Friday, but according to a woman surnamed Wang from the administrative office of the company, the suspension had nothing to do with the penalty notice.

"A general meeting was held to discuss issues such as changing accounting rules and to elect new independent directors. It will resume share trading on Monday," she said.

The share price of Hangxiao Steel Structure, a Zhejiang Province-based firm, has seen sharp unexplained rises since February 12 until it announced on March 13, that it had signed a contract worth 34.4 billion yuan with Hong Kong-based China International Fund Ltd for a construction project in Angola, Africa.

The contract further triggered its shares to rise on most days to the daily limit of 10 percent until CSRC launched an investigation on April 2 to check whether it was involved in any illegal trading.

Another anonymous CSRC official said on Friday methods of illegal trading on the Chinese mainland stock market had changed since the launch of the share restructure reform to make non-tradable shares, tradable ones.

"The market is witnessing increasing illegal trading via information disclosure rather than financial data frauds," he said.

According to him, CSRC has established a more efficient way to monitor unexplained sharp share moves and information disclosure of public companies.