A view of Shanghai Photo: VCG

China has stepped up punishment on capital market crimes including financial fraud, fraudulent IPOs and market manipulation. Financial practices must comply with laws and regulations, executives must be severely punished and underwriters must be held liable for negligence, Zhang Jun, president of the Supreme People's Court, said on Friday while delivering a report to the second session of the 14th National People's Congress (NPC).

For example, a company listed in National Equities Exchange and Quotations falsely increased revenue by 300 million yuan ($41.74 million) in its stock issuance, under-disclosed bank borrowings by 1 billion yuan, and fraudulently issued additional shares. The court ordered it to compensate investors 49 million yuan, and the company's executives bear up to 100 percent joint and several liability for negligence. Also, the intermediary agency responsible for verification shall bear 20 percent joint liability, Zhang said.

In 2023, the people's courts concluded 3.032 million financial cases, a year-on-year increase of 8 percent, according to Zhang. 

Also on Friday, Supreme People's Procuratorate (SPP) Procurator-general Ying Yong said that the SPP has strictly cracked down on financial crimes, and prevented and resolved financial risks in the past year. 

There were 27,000 people prosecuted for financial fraud and crimes that disrupted financial management order, including 18,000 for fund-raising fraud and illegal absorption of public deposits. 

We prosecuted 346 people for securities crimes such as fraudulent issuance, insider trading, and market manipulation, and jointly safeguarded the security of the capital market and the legitimate rights and interests of small and medium investors, Ying said.

Together with the State Administration of Foreign Exchange, we release typical cases to severely crack down on foreign exchange-related crimes. The SPP strengthened anti-money laundering cooperation with other departments and prosecuted 2,971 people for money laundering crimes, a year-on-year increase of 14.9 percent, Ying said.

The China Securities Regulatory Commission (CSRC) will strive to improve the quality of listed firms through supervision efforts in key areas such as IPOs and delisting. Furthermore, it will enhance regular supervision efforts on firms after they go public by cracking down on fraud and other violations in accordance with the law, CSRC Chairman Wu Qing told a press conference held Wednesday on the sidelines of the ongoing session of the national legislature.

Global Times