SHANGHAI (Reuters) - China's stock exchanges have published new rules with powers to delist companies which have committed serious public safety violations, with the Shenzhen stock exchange saying it has begun the process of delisting vaccine maker Changsheng Bio-Technology (SZ:002680).
The Shanghai and Shenzhen stock exchanges late on Friday posted separate statements on their websites detailing the rules, saying the move would improve market compliance and enhance the quality of listed companies.
Changsheng was found in July to have falsified data and sold ineffective vaccines, sparking public outrage and prompting the Shenzhen stock exchange to slap it with a "special treatment" risk alert, which is a step toward delisting. It has also been ordered to pay 9.1 billion yuan ($1.31 billion) in fines.
Under the new rules, the Shenzhen stock exchange said it has started delisting proceedings against Changsheng. The company's shares surged this week, which the exchange said indicated speculative activity.
China has previously delisted firms for breaching disclosure rules. In 2016, the Shanghai stock exchange canceled the listing of Zhuhai Boyuan Investment for breach of disclosure rules.