BIZCHINA / News |
Joint body set up to battle fraud in stocks(Shanghai Daily)Updated: 2007-02-26 10:23 The State Council said yesterday it has approved the setup of a joint workforce among seven state agencies to curb illegal securities dealings to protect interests of minority investors. The special team comprises the stock and banking regulators, the central bank, the Ministry of Public Security, the Supreme Court, the Supreme People's Procuratorate and the State Administration for Industry and Commerce, the Cabinet said in a notice on its website. The workforce will draft specific regulations to battle illegal stock-related activities, according to the notice. The workforce' other duties include extending the fight against illegal share activities nationwide and educating investors to prevent them from being swindled, it said. The team will also train local governments on how to clamp down on stock crimes and coordinate work among different provinces and municipalities, the notice said. Gui Minjie, vice chairman at the China Securities Regulatory Commission, will head the group with representatives from the other six bodies. China's yuan-backed shares have more than doubled in value since the start of last year, making equity investments appealing but also creating incidents of stock-related frauds. Many investors were coaxed to buy so-called "original shares" of companies which assured them of hefty gains when the firms go public. In fact, a majority of these firms did not have plans for public listings. Such illegal stock activities, which often target the retired and laid-off workers who are thirsty for quick profit, may stoke social unrest and should be curbed, the State Council said earlier. China will define any public stock sale involving 200 investors as illegal if it fails to gain regulatory approval. An institution is not allowed to be an underwriter unless it has licenses from the stock watchdog. Regulators last year received several thousand letters, phone calls and visits by investors regarding illegal stock activities, which have doubled in number from a year before, according to the State Council. (For more biz stories, please visit Industry Updates)
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