China's stock market regulators have forced controlling shareholders to pay back to their companies at least 1.23 billion yuan in misappropriated funds, according to a report in the Shanghai Securities News.

 

Statistics with the China Securities Regulatory Commission (CSRC) show that the money was repaid by seven companies in the past ten days since a crackdown on mismanaged corporate funds was launched.

 

The CSRC said last week it will begin prosecuting controlling shareholders who fail to repay misappropriated funds by the year.

 

The newspaper reviewed a new case it says was exposed during the crackdown involving the controlling shareholders of Baoshuo Co., Ltd. The paper said the officers of the company misappropriated 530 million yuan by making false presentations and they are now under investigation.

 

The misappropriation of funds by the controlling shareholder of listed companies has been a serious issue afflicting China's burgeoning stock market. In June, China's legislative body adopted an amendment to the criminal code making misappropriation of a listed company's funds by controlling shareholders a crime.

 

CSRC figures show that by the end of September, 309 listed companies had retrieved 20.4 billion yuan that had been misappropriated by their controlling shareholders. However, the controlling shareholders of 102 listed companies still had a total of 25.4 billion yuan that needed to be repaid.

 

(Xinhua News Agency October 24, 2006)