China vows ‘zero tolerance’ towards illegal market behaviour

Chinese Vice Premier Liu He attends the closing session of CPPCC in Beijing.

SHANGHAI: China will show “zero tolerance” towards securities and accounting fraud and will step up a crackdown on major capital-markets crimes, financial regulators said after a meeting of the Financial Stability Development Committee.

The meeting on Sunday (Jul 12) was chaired by Vice Premier Liu He, the Cabinet-equivalent State Council said in a statement.

The regulators said they would toughen penalties and establish a crime-busting team with relevant agencies to strengthen cooperation.

They would also deepen the reform of the market’s delisting mechanism to weed out bad companies from the country’s stock markets.

China has been trying to limit the country’s reputational damage after accounting scandals at companies including Kangmei Pharmaceutical and Kangde Xin Composite Material Group.

The China Securities Regulatory Commission (CSR) on Friday punished GF Securities for its role in the US$12.6 billion financial fraud at drugmaker Kangmei.

GF Securities was banned from the securities-sponsor business for six months, and from bond underwriting for a year.

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