CSRC zeroes in on financial disclosure for IPO firms

China's securities regulator has instructed 15 special investigation teams to review the financial disclosure of a selection of companies that have filed for IPOs, the Shanghai Securities reported Saturday, a move indicative of the government's commitment to deepening IPO reform.

Two rounds of checks will be conducted on the first batch of 30 IPO applicants, which were randomly picked out on April 3 from hundreds of companies awaiting IPOs, according to the Saturday report, citing an unnamed spokesperson for the China Securities Regulatory Commission (CSRC).

Nearly 900 companies were awaiting IPO approval as of February on both the Shanghai and Shenzhen stock exchanges.

CSRC will further reform the IPO system, focusing on financial disclosure, stated the spokesperson, who disclosed that reform plans are being finalized and would be announced in due course.

The latest move came on the heels of IPO applicants' checks of their financial statements, as ordered by CSRC at the end of last year and ahead of the deadline set for March 31.

Concurrently at the news conference, the securities regulator also dismissed mounting speculation over the reopening of the country's IPO market, albeit implicitly.

CSRC has given no recent media interviews concerning the hotly speculated IPO reopening, said the spokesperson, in an apparent attempt to dispel such rumors. Many investors have been accusing the CSRC of loose scrutiny over IPO applicants, thus turning the capital market into a gold mine for certain dishonest companies and at the cost of common investors.

Such reopening speculation was raised by a series of recent commentaries by the official Xinhua News Agency. Responding to the widespread rumors fuelled by its commentaries, Xinhua responded to say these were commonplace daily articles, and that any exaggeration should be avoided, Investor Journal reported over the weekend, citing an unnamed internal staffer with Xinhua. The regulator has issued few IPO approvals since June and has suspended all approvals since late October, moves that many believe were aimed at stabilizing China's stock market.