On June 6, the Shanghai Stock Exchange (SSE) held a 2014 training meeting for companies on the risk alert board, in a bid to timely carry out the work of preventing delisting risks and protect investors’ interests. It is stressed at the meeting that the companies on the risk alert board will be urged to fully disclose information about delisting risks and relevant progresses. Besides, compliance of the companies with major risks in their previous information disclosures will be rechecked.
All the board chairs or general managers, and secretaries to directorates of the companies on the SSE risk alert board attended the meeting.
SSE Vice President Xu Ming emphasized at the meeting that an alarm bell of delisting is ringing when a listed company enters the risk alert board, and regulatory authorities will pay more attention to such companies. All these companies are expected to promptly formulate and implement schemes for removing delisting risks, and take responsibilities for investors, especially small and medium-sized investors. If a company on the risk alert board involves many mergers, acquisitions and reorganizations, or has much inside information and fluctuations of stock prices, the company and its relevant staff must raise awareness to strengthen management of information disclosure and not commit inside trading.
In his speech with the theme of “Further Intensifying Regulatory Work of Risk Alert Board”, Xu said that under the backdrop of regulatory transformation, the SSE will change its thoughts to cement in-process and aftermath regulation, establish its authority as a regulatory body, facilitate the standard operation of listed companies, safeguard the principle of “openness, fairness, and justice” on the market, and protect investors’ rights and interests, with information disclosure as the core, investors’ needs as the orientation, the Direct Channel for Information Disclosure as the key work, and industry regulation as the basis.
It is introduced that for the regulation on the companies on the risk alert board, the SSE will strengthen the effectiveness of the companies’ information disclosure and urge them to correctly and fully disclose to the investors their listing suspension risks, delisting risks, and all the measures they have taken to remove these risks, by attaching importance to two core issues, namely risk disclosure and settlement progress. Besides, the SSE will launch a special recheck mechanism to re-examine the compliance of the companies with major risks in their previous information disclosures. Any problem detected in the recheck will be handled immediately to ensure the regulatory work is well in place, leaving no regulatory loopholes.
After the 2013 annual reports of listed companies were disclosed, the SSE strictly implemented the delisting system according to the SSE stock listing rules. So far, risk alerts have been imposed on 26 SSE-listed companies (a drop of 16% compared with 31 companies that had received risk alerts by December 31, 2013), among which 19 received delisting risk alerts and the other 7 received other kinds of risk alerts, with *ST and ST imposed on their relevant shares, respectively.
Further analysis shows that one of the major reasons for the companies receiving *ST is their losses for 2 consecutive years, as a total of 15 companies, or 94% of all the companies newly receiving *ST, belong to this category. On the other hand, one of the major reasons for the companies receiving ST is their abnormal production and operation activities, as 5 out of the 7 companies receiving ST have such problems.
At the meeting, backbone personnel of the SSE Department I of Listed Companies Supervision and the SSE Market Surveillance Department trained the attendees in terms of listing rules, mergers, acquisitions and reorganizations, and control of inside trading. They explained relevant policies and key points, and answered questions of the companies to help them have a good understanding of relevant policies. Next, the SSE will further enhance the pertinence of its regulation and services by paying visits and making surveys to urge the companies to eliminate risks.
