China may jail listed firms' executives found guilty of abusing corporate assets, official newspapers said on Monday, imposing steeper penalties in a battle against white-collar crime aimed also at cleaning up unruly bourses.
Beijing was pondering amendments to the country's Criminal Law to take aim for the first time at what analysts say is frequent abuse of power by senior executives, major financial newspapers reported.
Abuses such as gratuitously offering company goods, services or assets to a third party, or deliberately selling them at low prices would attract up to seven years in prison, according to a draft of the amended law debated in parliament last week. Anyone found to have rigged securities markets prices would be jailed for up to five years and fined up to 3 million yuan ($370,000), according to a draft
"The amendments of the Criminal Law are aimed at creating deterrents targeting such cases," the China Securities Journal said.
About 107 out of more than 1,000 listed firms had been involved in 177 corruption cases this year, from accusations of falsifying earnings to crimes by executives, up from 56 firms and 111 cases in 2004, the Shanghai Securities News reported.
Some listed firms that have run afoul of regulatory scrutiny include Inner Mongolian dairy firm Yili Industrial Group Co Ltd, whose senior executives have been charged with illegally transferring company funds, and the publicly traded arms of high-profile private conglomerate D'Long.
It was unclear when the amended law would be passed by parliament. Typically, a draft would be debated and changed several times before being passed. China launched a sweeping crackdown on market corruption in 2001 as Beijing paves the way for development of capital markets, hoping to reduce dependence on bank loans for nearly 90 percent of corporate financing.
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