The Shanghai Stock Exchange (SSE) has kept a close watch over the controlling shareholders and actual controllers of its listed firms, said a news release at the SSE website on Thursday.
One typical example, among others, is its recent regulatory practices over a company which was suspected of paying too much for the assets of a controlling shareholder. This deal was later stopped by this company after a joint on-site inspection and inquiry by the SSE and the local securities watchdog.
Controlling shareholders and actual controllers, as the crucial players in the corporate governance of public firms, have received considerable attention from the stock exchange recently.
Stock pledge has been one of the focuses in this regard. The SSE has required these players to disclose related information in detail and to follow strict share transfer rules to avoid an adverse impact on the secondary market.
SSE's recent survey revealed that about 150 of its listed firms saw their controlling shareholders pledge over 80 percent of shares under their name. SSE had sent regulatory letters and conducted talks with these shareholders on the potential risks of their actions.
Suspicious transactions have been under scrutiny, which involved the high-priced purchases of assets with questionable quality and performances.
These assets often bore little relevance to the main businesses of the companies making the payment and were held by their controlling shareholders.
In response to such transactions, SSE focused its attention on the quality of the assets and the motives of the controlling shareholders. It pressed for due diligence by intermediary agencies and when necessary, referred the cases to the securities watchdog for further joint actions.
Such regulatory actions prompted the companies involved to either re-value the assets or stop the deal.
Misappropriation of funds and illegitimate guarantees were strictly targeted. SSE has been quick to respond to several high-profile cases and will continue to crack down on such actions in the future.
Based on its regulatory practices and the typical cases, SSE will revise its relevant rules for the behaviors of controlling shareholders and actual controllers.
One typical example, among others, is its recent regulatory practices over a company which was suspected of paying too much for the assets of a controlling shareholder. This deal was later stopped by this company after a joint on-site inspection and inquiry by the SSE and the local securities watchdog.
Controlling shareholders and actual controllers, as the crucial players in the corporate governance of public firms, have received considerable attention from the stock exchange recently.
Stock pledge has been one of the focuses in this regard. The SSE has required these players to disclose related information in detail and to follow strict share transfer rules to avoid an adverse impact on the secondary market.
SSE's recent survey revealed that about 150 of its listed firms saw their controlling shareholders pledge over 80 percent of shares under their name. SSE had sent regulatory letters and conducted talks with these shareholders on the potential risks of their actions.
Suspicious transactions have been under scrutiny, which involved the high-priced purchases of assets with questionable quality and performances.
These assets often bore little relevance to the main businesses of the companies making the payment and were held by their controlling shareholders.
In response to such transactions, SSE focused its attention on the quality of the assets and the motives of the controlling shareholders. It pressed for due diligence by intermediary agencies and when necessary, referred the cases to the securities watchdog for further joint actions.
Such regulatory actions prompted the companies involved to either re-value the assets or stop the deal.
Misappropriation of funds and illegitimate guarantees were strictly targeted. SSE has been quick to respond to several high-profile cases and will continue to crack down on such actions in the future.
Based on its regulatory practices and the typical cases, SSE will revise its relevant rules for the behaviors of controlling shareholders and actual controllers.
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