Jan. 8, 2007 (China Knowledge) – The China Securities Regulatory Commission (CSRC) has started investigating misappropriation cases of 17 Mainland-listed companies.

A CSRC spokesman said on Sunday that the shareholders of these companies would be prosecuted as they had failed to return the misappropriated RMB 9.2 billion before the deadline of Dec. 31, 2006. Although 36 companies, which incurred a total of RMB 14.6 billion misappropriated funds, had failed to meet the deadline, 19 companies have proven to the CSRC that the money can be recovered, thereby being exempted from investigation.

To improve the corporate governance of the 1,400 companies listed on the Shanghai and Shenzhen stock exchanges, as well as to safeguard the interests of shareholders, CSRC issued a new ruling in Oct. 2005, requiring listed companies to recover the misappropriated funds by the end of 2006. A total of RMB 33.57 billion that was misappropriated by controlling shareholders have been retrieved from 402 companies as at the end of 2006.