Shuijingfang under investigation by regulator

By Zhao Qian Source:Global Times Published: 2013-10-24 23:18:01

Chinese liquor brand Shuijingfang said in a statement filed with the Shanghai Stock Exchange Thursday that it is being investigated by the regulator over possible irregularities at the firm, the latest case in the ongoing crackdown on illegal actions in the nation's capital markets.

Shuijingfang said it has received an investigation notice from the China Securities Regulatory Commission (CSRC) alleging the firm is suspected of violating securities market laws and regulations, without disclosing more details.

A source was quoted by the Shanghai Securities News Thursday as saying that Shuijingfang had failed to release details in a timely manner about its agreements with three other companies including Sichuan Quanxing Distillery Co.

The investigation of Shuijingfang follows 10 similar cases opened by the CSRC this week.

Henan Dayou Energy Co announced late Wednesday that it is being investigated by the CSRC due to irregularities in its information disclosure. Its shares declined by 7.94 percent Thursday.

"The regulator is taking its most severe measures so far in cracking down on irregularities this year," Li Daxiao, director of research with Shenzhen-based Yingda Securities Co, told the Global Times Thursday.

The CSRC has increased the number of its staff members engaged in investigations into irregularities in the domestic capital markets to 600, the Shanghai Securities News reported.

Since Xiao Gang became chairman of the CSRC in March, the commission has been stepping up its efforts to combat illegal activities in the market.

Just in September, 39 listed firms were placed under investigation, 1.5 times the number in August.

Among all the irregularities at the listed enterprises, Li noted that false information disclosure and some unlawful measures during restructuring of enterprises are two major types of violations.

Following news of the investigation, shares in Shuijingfang fell by 2.08 percent to 12.23 yuan per share Thursday.

"It is likely that the enterprises under investigation will be punished," Yang Zhaoquan, a lawyer at Beijing Vlaw Firm, told the Global Times Thursday.

Yang suggested that investors who suffer losses when investigations cause a slump in shares should claim compensation.

Posted in: Markets

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