Using Listco as ATM to be Criminalized
June 9th, 2006Fan Fuchun, a vice-chairman of the CSRC, says that looting of listed companies will become a crime when China’s Criminal Law is amended in the second half of this year.
Fan made the comments in a speech reported in the Chinese press here. The occasion was a training session for CEOs and board chairmen of listed companies.
As I’ve previously noted, the CSRC is campaigning to have misappropriated funds returned to listed companies.
The PRC Company Law as revised in 2005 allows for shareholder derivative suits. That might provide a civil remedy to augment the promised criminal remedy for looting by controlling shareholders, but the combination of 1) local government control of local courts and 2) local government ownership of listed firms may mitigate the efficacy of all these efforts.