Rules addressing media accuracy set

(Shanghai Daily)
Updated: 2007-06-13 09:00

The Shenzhen Stock Exchange has asked listed firms to double check information they provide during news media interviews before it is published to ensure price-sensitive data are not revealed improperly.

Listed companies should ask reporters to provide draft stories for review to weed out "wrong or not-for-public important information," according to a notice sent to public firms last month and obtained by Shanghai Daily yesterday.

When media seek confirmation of market rumors, companies should decline immediate comment and consult with involved parties to determine the facts, the notice said.

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The requirements were aimed at "reducing the negative effect of rumors on stock trades, beefing up listed firms' information disclosures and protecting the legal rights of investors," the Shenzhen bourse said in the notice.

Yuan equities on China's mainland have more than tripled in value since the beginning of last year, causing a growing number of people to channel their bank savings into stocks and stoking a slew of rumors over corporate restructuring.

The notice also requires listed companies to avoid commenting freely on stock analysts' projections over the firms' profitability and on other financial figures.

A public firm should also prepare a list of questions that it doesn't want to answer before holding meetings with securities analysts, the notice said.

If any rumor clouds the market, a listed firm must make clarifications in securities newspapers designated by the stock regulator as well as the official Website of the Shenzhen exchange, it said.

The Chinese mainland's two stock bourses early this year demanded public companies to conduct internal checks to ensure they have sound fire-wall systems to prevent information leaks.

The stock regulator has also punished several companies for not revealing news in a timely manner and causing wide fluctuation in their stock prices in the past few months.

"It's not wise for listed firms to simply decline to comment on any media or analyst questions," said Wu Ke, a Zhongtian Investment Consulting Co analyst. "The companies had better set up a complete internal system to deal with unexpected incidents and prevent vital information from being disclosed in advance."

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