Recently the CSRC has investigated the 9top Group, which is suspected of false information disclosure. This case releases a signal that the capital market will increase the intensity of anti-counterfeit.
Expert thinks, to maintain a healthy development of the capital market , we can not only increase regulatory enforcement, greatly improve the violation cost, significantly increase the penalties for illegal behavior, but also should accelerate the delisting system and litigation witness system building .
As for the chaos of capital market, Liu Shiyu, the chairman of the CSRC, said that we must immediately deal with the fraud cases in capital market and conduct investigations at a higher level.
The listed companycounterfeits in various way
The 20 typical illegal cases announced by the CSRC on February 24, 2016 include a lot of listed companies ignoring market rules. Among them, Xintai Electric, in order to go public on the gem, submitted the application materials containing false financial information and continued to disclose false statement after IPO.
Shanghai Amarsoft Information & Technology coined false information from May 2014 to February 2015; Pu JunYi, chief analyst in computer industry at Orient securities company, with Zheng Qiwei, industry researcher, wrote an e-mail in misleading language and send to the 128 financial institutions more than 11000 letters. Lin Shiyu said, the CSRC will publish more influential cases.
The cost of violations should be substantially increased
Some illegal cases of assets reorganization, like fake assets reorganization, non-standard public announcement, non-equivalent connected transaction, have often occurred. The reason is that the capital market and the legal system in our country remains to be perfected. Tian Lihui, head of the institute of financial development at Nankai university, said the listed company should put more emphasis on company faith, credit and reputation. The listed company in china are tend to pursue short-term profits which leads to a ‘fast food’ trend of capital market. More important, with weak striking force, illegal earning is more than violation cost, it will inevitably lead to listed companies desperate for profiteering.
Tian Lihui said, Firstly, we should greatly improve the violation cost, significantly increase the penalties and perfect delisting system; Second, we should clarify the necessity and importance of information disclosure, strengthen the authenticity examination and ensure the openness, transparency and authenticity of information disclosure. Thirdly, it is recommended that the CSRC set up relevant departments to collect and sort out the illegal information of listed companies, and provide convenience for law enforcement departments. At the same time, we should encourage public opinion and netizens to supervise the illegal behaviors of listed companies, which make up for the limited liability of CSRC law enforcement personnel.
These three measurements complement each other, and only by advancing together can we form a good market environment. Tian Lihui stressed that strong penalties make company dare not violate, transparency of information disclosure make company can not violate, thus on the basis of dare not violate andcan not violate, we can realize no violations goal.
Insider pointed out that mature securities markets such as the United States always adhere to civil liability, administrative responsibility and criminal responsibility. In addition, the securities law, securities exchange act ，federal civil procedural law ，the private securities litigation law ，the securities litigation uniform standard act gives investors litigation rights.
The United States, for example, the Enron case, not only the company closed, but also company executives were charged and convicted. The former chief executive of Enron, Jeffrey skilling, was also sentenced to 24 years and 4 months in prison for hundreds of millions of dollars in property claims.
The delisting system is expected to be further improved.
China's delisting system started in 2001, the CSRC said. Promulgated in October 2014, “Opinions on the delisting system reform of listed companies” has been clearly pointed out the compulsory delisting system, and the serious illegal activities include two big aspects: fraud security issuing and major information disclosure illegal.
According to incomplete statistics, since 2001, about 40 companies in China's securities market have voluntarily delisted, and about 50 companies have been forced to delist, most of the forced delisting companies are mainly due to unqualified financial indicators.
Jiang Yang, vice chairman of the CSRC, said during the NPC and CPPCC sessions that the CSRC has made several demands on delisting this year: first, to strengthen information disclosure and prevent financial fraud; The second is to ask intermediary organizations to fulfill the duty of gatekeeper; Third, to revise and improve the standard of delisting; Fourth, we will strengthen supervision over exchanges. If the exchange is to be truly responsible, it should be regulated in accordance with the law, and delisting should be implemented.
Lawyers believe that administrative penalties have its limits, it is more common in a mature market to make the system of prosecution perfect anddeter illegal behavior by high civil compensation.
Class action is often used in the U.S. securities market, and our country does not have a system of class action. Only when the civil procedure law was amended in 1991, two kinds of representative litigation system were clearly defined, one was the representative lawsuit of certain number of people, and one was the representative lawsuit of the uncertain number. This is the legislative root of our collective action system. Wang Dong, a senior partner at a Beijing law firm, said when the domestic small and medium investors' legitimate rights and interests suffer damage, in addition to initiate the collective lawsuit and draw lessons from foreign representative lawsuit, also can rely on the investment service center and other professional institutions for small and medium investors.
Wang Dong pointed out that should establish the securities civil compensation for public interest litigation system, securities litigation witness system and a series of investor protection mechanism, then form the detailed rules to better protect the legitimate rights and interests of small and medium investors.
