China Securities Regulatory Commission, Implementing the «Suspending and Terminating the Listings of Loss-making Listed Companies Implementing Measures (Revised)» Supplementary Provisions

Issued: March 18 2003
Effective: as of date of issue

Main contents: For companies with successive loss for two years as a result of material accounting mistakes or false records, the stock exchange shall decide to suspend their stock trading if loss continues after retrospective adjustment of the financial and accounting reports (Item One). If there are non-standard and unqualified opinions in the audit report, the stock exchange may set up an expert committee to make professional judgment on the material accounting issues in determining a suspension, resumption or termination of listing (Item Two). If loss sustains for two years after retrospective adjustment as mentioned in Item One has been made, or if non-standard and unqualified opinions are issued on the financial and accounting reports that show profits after the retrospective adjustment, the most recent shareholders' meeting of the company should discuss on the resolutions on entering into agreements with a qualified securities company and the China Securities Depository and Clearing Corporation Limited preparing for resumption of listing in the case of suspension of listing or transfer of shares in the case of termination of listing (Item Three). If a listed company fails to disclose annual or interim reports within the statutory term or fails to rectify the false financial and accounting reports within a stipulated period, the stock exchange will make a decision as to suspend, resume or terminate listing (Item Eight).
Related legislation: Suspending and Terminating the Listings of Loss-making Listed Companies Implementing Measures (Revised), Nov 30 2001, CLP 2001 No.10 p8