It is a crime for a person to issue shares or corporate bonds based upon a prospectus or subscription form containing false or misleading information. It is also a crime to provide financial and accounting information to shareholders or the public containing misrepresentation, or to engage in active concealment of accurate information. In November of 1998,the Beijing No.1 Intermediate People's Court convicted the president and bookkeeper of the Hainan Minyuan Modern Agriculture Development Shareholding co., Ltd., to prison terms for issuing false financial and accounting information concerning the company. The court found that Hainan Minyuan-which was traded on the Shenzhen Stock Exchange-did not have the RMB 570 million (USK $68.7 million) in revenue claimed in the company-issued report. The court further found that the company's report misled investors into believing that it had the required permits for construction of an office tower when it did not.
