Caixin
Feb 28, 2013 06:09 PM

CSRC Hands Out Range of Punishments in Green-Land Scandal

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(Beijing) – The China Securities Regulatory Commission (CSRC) said on February 27 that it would severely punish several companies and their employees involved in the Yunnan Green-Land Biological Technology Co. Ltd. scandal.

The three institutions the CSRC said it would punish were Huatai United Securities, Sichuan Tianchengmen Law Firm and Shenzhen Pengcheng Certified Public Accountants Co. Ltd.

The CSRC said it would revoke the securities service license of Shenzhen Pengcheng, but did not specify the punishments for the other two companies.

The qualifications of sponsor representatives at Huatai United who were involved in the scandal regarding fraudulent share issuance would be annulled, the CSRC said. Their qualifications for conducting securities business would also be cancelled.

Green-Land listed in Shenzhen in 2007.

The securities regulator said Huatai United did not discover that Yunnan Green-Land, a tree company in Kunming, capital of the southwestern province of Yunnan, fraudulently claimed assets and revenues in its prospectus.

Sichuan Tianchengmen did not properly carry out an inquiry to verify Yunnan Green-Land's assets, the CSRC said. Shenzhen Pengcheng was blamed for not finding the fraud in the company's financial report.

On February 7, the Kunming Municipal Intermediate People's Court fined Yunnan Green-Land 10.4 million yuan over the fraudulently issued shares and sentenced He Xuekui, its former chairman, to ten years in prison.

Yunnan Green-Land faked assets and revenues in prospectuses and annual reports for 2007, 2008 and 2009.

The CSRC would continue to punish such behavior, a source at the regulator said. It would also strictly monitor companies' initial public offering activities to protect investors.

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