Watchdog urges public firms to be competitive

(Shanghai Daily)
Updated: 2007-06-22 09:03

China's share regulator yesterday encouraged mainland-listed firms to tap domestic and overseas stock markets to raise funds for expansion and conduct cross-border consolidation to boost their competitiveness.

Listed firms "should learn to use capital markets at home and abroad to raise funds and conduct cross-border mergers and acquisitions," Shang Fulin, chairman of the China Securities Regulatory Commission, told a corporate-governance forum in Shanghai yesterday.

By tapping domestic and overseas markets, "they should also consolidate resources and lure strategic investors" to help bolster global competitiveness, he said.

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Shang's comment came at a time when Chinese stock authorities are battling insider trading and market manipulation while urging quality overseas-listed mainland firms to sell shares in the domestic market.

The CSRC is also prompting giant mainland public firms to seek M&A opportunities abroad as way to create conglomerates.

In order to shore up corporate governance, domestically listed firms must beef up information disclosures, enhance internal controls, cut costs and improve management-system innovation, Shang said.

Public companies must also continue to improve internal-management mechanisms during M&As or corporate-restructuring activities to curb risks and to ensure revamps are done efficiently, according to Shang.

The CSRC has punished several senior executives of listed firms, stock analysts and fund managers for securities-related crimes including stock-price rigging and misleading investors with fake analysis reports in the past two months.

"Boosting listed firms' quality is the only way to realize the sustained and steady growth of the capital market," Shang said. "The regulator will boost oversight and create the environment for public companies to develop healthily and become more accountable to investors."

As part of the regulator's future work plan to boost corporate quality, the CSRC will encourage and attract large quality enterprises as well as small and medium-sized firms with high growth potential to list, Shang said.

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