Shanghai Stock Exchange, Issues Relevant to the Strengthening of Risk Warning, Etc. Regarding Companies under the Risk of Termination of Share Listing Circular

Issued: April 3 2003
Effective: May 8 2003

Main contents: The Exchange will impose special treatment to shares of companies under the risk of termination of their share listing (Item One). Such risky companies include: (1) those suffering loss for two consecutive years based on their annual reports, (2) those suffering loss for two consecutive years as a result of material accounting mistakes or false records, (3) those failing to rectify the false accounting reports within the specified period of time, (4) those failing to disclose annual or interim reports within the statutory period, (5) those falling within the period of its resumption of trading and its disclosure of the first annual report after the resumption (Item Two). The Circular also sets out the procedures for the companies under the above circumstances to take necessary or corrective actions within the specified period of time and, accordingly, the Exchange will determine to implement or cancel the decision to impose a risk warning or to order suspension or resumption of listing.
Related legislation:PRC Company Law (Amended), Oct 27 2005, CLP 2005 No.10 p21; PRC Securities Law (Amended), Oct 27 2005, CLP 2006 No.1 p31; Suspending and Terminating the Listings of Loss-making Listed Companies Implementing Procedures (Revised), Nov 30 2001, CLP 2001 No.10 p8; Implementing the«Suspending and Terminating the Listings of Loss-making Listed Companies Implementing Procedures (Revised)» Supplementary Provisions, Mar 18 2003, CLP 2003 No.4 p10; Shanghai Stock Exchange, Share Listing Rules (Amended Text 2001), Jun 8 2001, CLP 2001 No.6 p18 and Compilation Rules for Information Disclosures by Companies That Offer Securities to the Public (No. 14): Audit Opinions That Are Not Standard and Unqualified and the Handling of Relevant Matters, Dec 22 2001, CLP 2002 No.1 p7