The Shanghai Stock Exchange (SSE) has recently announced three cases of illegal information disclosure and reported the relevant measures regarding the consecutive irregularities in the shareholding increase and decrease by listed companies' major shareholders.
According to an SSE official, the irregularities involve, respectively, relevant shareholders of Song Liao Automobile Co., Ltd. (ST Songliao), Guangxi Beisheng Pharmaceutical Co., Ltd. (ST Beisheng) and S&P Pharmaceutical Co., Ltd. (S&P Pharmaceutical), who held over 5% shares of the total issued shares in the companies. The reasons of their irregularities were different. In the case of ST Songliao, the relevant shareholder transferred once 10% of the total issued shares through the block trading platform without fulfilling in time the filing, announcement and other relevant obligations. With regard to the case of ST Beisheng, the stock shares with terminated sales limit accumulatively sold by the relevant shareholder within a month through the auction trading system accounted for more than 1% of the total issued shares. As for the case of S&P Pharmaceutical, the relevant shareholder bought within 6 months the same stock in the shareholding lessening process, thus violating the rules for short-term trading.
Regarding the violations, the SSE has taken a series of regulatory measures including interviewing with relevant shareholders, requiring them to sign the commitment letters of compliance trading and to take remedy measures within the time limit. In addition to such disciplinary punishment measures to relevant violators as the trading limit to their securities accounts and public criticism, it has reported the relevant cases to the China Securities Regulatory Commission for punishment.
The SSE reminded all investors, especially the major shareholders of listed companies, whenever buying or selling shares during the period of shareholding increase or decrease through the SSE's auction trading system or the block trading system, to strictly abide by such threshold requirements as "5%", "1%", "1 month" and "6 months" stipulated in the "Securities Law", the "Measures on Administration of Listed Companies' Acquisition", the "Guidance Opinion on Transfer of Stock Shares with Terminated Sales Limit of Listed Companies" and other laws and regulations. For any illegal activity, the relevant shareholders should take remedy measures in a timely manner after the warning.
Meanwhile, the SSE has required that all member units should undertake the responsibilities to supervise over their clients. The listed companies are required to strengthen supervision and regulation over their shareholders' trading, to do a good job in the publicity and education of the above laws and regulations as well as the relevant business rules of the SSE, and to guide and remind the major shareholders to increase and decrease shareholding in a lawful and complied way. For investors who violate relevant regulations, the SSE will implement regulatory measures and disciplinary punishment according to relevant rules.
The SSE hopes that all investors contribute to the long-term, sound and stable development of the securities market by strictly conforming to laws, regulations and the SSE's business rules in the securities trading, maintaining the securities market order, fulfilling the information disclosure obligation and cooperating with the listed companies in the information disclosure.
