China punishes firms for faking assets to get listed

BEIJING - China is to punish two firms for faking assets to achieve backdoor listings, bringing toxic assets into the A-share market.

China's securities regulator announced Friday that they would impose the maximum penalty on office service provider China Nine Top and AnShan Heavy Duty Mining Machinery Co, Ltd for severe violations of information disclosure rules.

China Nine Top is reported to have inflated its revenue and bank deposits while covering up an assets gap in order to restructure with the listed company AnShan Heavy Duty Mining Machinery.

"The case involves a large amount of money, extremely dirty tricks and severe violations of the rules," said Zhang Xiaojun, spokesperson with the China Securities Regulatory Commission (CSRC).

Wrongdoers will be fined 4.4 million yuan ($635,000) and several senior managers with China Nine Top will be banned from the securities market for five to ten years.

The CSRC will closely watch restructuring cases to ensure that quality and investors' interests are well protected, Zhang added.