(Promulgated by The China Securities Regulatory Commission on 2003-3-18)
With a view to protecting the rights and interests of the investors, the Supplementary Provisions have been formulated on the relevant problems occurred during the enforcement of the Implementation Measures for Suspending and Terminating the Listing of Failing Listed Companies (Revised):
I. In case of material accounting errors or false records in the financial and account reports when the company took initiatives to correct or is ordered to make corrections for carrying out backward adjustment with the financial and accounting reports of the previous years, thus leading to losses for consecutively for the latest two years with ongoing losses in the same year when the backward adjustment is made, the Stock Exchange shall within ten working days upon the date when the company publishes the annual reports make decisions on temporary suspension of the listing of its stocks.
II. Upon making decisions on temporary suspension, resumption or termination of listing when the financial and accounting reports in the underlying regular reports were issued by CPAs with audit reports containing unreserved opinions with interpretative descriptions, reserved opinions, negative opinions or refusal of opinions (hereinafter referred to as "audit reports with non-standard unreserved opinions"), the Stock Exchange may organize an expert committee for making independent professional judgment on the problems of material accounting treatment that influences the profit truthfulness involved in the audit reports with non-standard unreserved opinions, based on which the Stock Exchange may make corresponding decisions.
III. For the companies that have witnessed consecutive losses for the latest two years or for the companies that have witnessed consecutive losses for the latest two years upon backward adjustments made according to the stipulations of Article 1 of the Supplementary Provisions, in case their annual financial and accounting reports keeps on indicating losses or profits but issued with audit reports with non-standard unreserved opinions, the Board of directors of the company shall in reviewing the annual financial and accounting reports make resolutions on the following items, which should be submitted for review by the recent General Shareholder Meeting: (I) In case of temporary suspension of listing of the stocks of the company, the company shall sign an agreement with a qualified securities firm with a covenant that (including but not limited to) the company engages the securities firm as the recommender for resumption of the listing of the stock in question; and in case of termination of listing of the stock, the securities firm will be authorized to provide services for share transfer and to handle with registration for withdrawal of the shares from the market registration and settlement system of the Stock Exchange, handle with reaffirmation of the shares and handle with share registration and settlement of the share transfer system. The qualified securities firms refer to those eligible for "handling with the services for share transfer" and "listing recommender" (hereinafter referred to as the "undertaking securities firms"). (II) In case of temporary suspension of listing of the stocks of the company, the company shall sign an agreement with China Securities Registration and Settlement Co., Ltd. The agreement contains a covenant that (including but not limited to) in case of termination of share listing, the company engages China Securities Registration and Settlement Co., Ltd as the custodian, registration and settlement institution for all its shares. (III) In case of termination of listing of the stocks of the company, the company shall apply for entry of its shares into the agency share transfer system for transfer, and the shareholder meeting authorizes the Board of directors to handle with the relevant matters relating to termination of listing of the shares of the company and entry into the agency share transfer system for transfer.
IV. After the shareholder meeting reviews and passes the proposals mentioned in Article 3 of the Supplementary Provisions, the board of directors shall complete the signing of agreements with China Securities Registration and Settlement Co., Ltd. and the "undertaking securities firms", which should be published and reported to China National Association of Securities Dealers, the agency of the CSRC where the company is registered and the Stock Exchange.
V. In case of termination of the listing of the stocks of the company, the undertaking securities firm shall within five workings days after the Stock Exchange makes decision on terminating the listing of the stocks of the company publish the Public Announcements on Relevant Matters Relating to the Share Transfer on Agency on the newspapers, magazines and Internet sites designated by the CSRC for announcement of the following content: (I) Handling with the termination of the listing of shares; (II) Time and means for handling with the formalities for share reaffirmation; and (III) Conditions and arrangements for agency of share transfer.
VI. The undertaking securities firm shall within twenty working days upon the decisions of termination of the listing of the shares of the company by the Stock Exchange complete the initial preparatory work for the registration of the withdrawal of the shares stopped from listing, handling with the formalities for reaffirmation of the shares for the shareholders and open the account for transfer of the shares of a non-listing company.
VII. In case the Board of directors fails to perform its duties relating to resumption or termination of the listing of the shares of the company to detrimental of the legitimate rights and interests of the shareholders, the shareholders may requires for the company to perform the duties in question and prosecute for the relevant obligations. In case the undertaking securities firms authorized by the company fails to perform the agreement reached to detrimental of the legitimate rights and interests of the company or the shareholders, the company may requires for the undertaking securities firm to perform the duties in question and prosecute for the relevant obligations according to law.
VIII. In case the public listed company fails to disclose the annual reports or semi-annual reports within the statutory periods or make corrections to the false financial and accounting reports within the statutory periods, the Stock Exchange shall made decisions on temporary suspension, resumption or termination of the listing of the shares of the company according to the provisions of the relevant laws, regulations and Rules for Listing of Stocks.
IX. Upon decisions on temporary suspension or resumption of the listing of the stocks of the listed company according to law, the Stock Exchange shall report to the CSRC; and upon decision on termination of the listing of the stocks, the Stock Exchange shall go through filing with the CSCRC.
X. The Supplementary Provisions shall enter into force as of the date of the promulgation.
