China delists first stock

The China Securities Regulatory Commission has pledged to get tough on loss-making companies

SHANGHAI, China -- Chinese regulators have delisted a company from its exchanges for the first time.

Shanghai Narcissus Electric Appliance Co. Ltd. was removed from the Shanghai exchange, the China Daily reported on Tuesday.

Narcissus, which is also based in Shanghai, had B class shares as well as A class stock. B shares are open to overseas investors, while A shares are available only to Chinese investors.

The company's stock has been suspended since Wednesday, when it reported its fourth year of losses.

Regulator enforces new rules

The Chinese stock regulator, the China Securities Regulatory Commission, promised in March to delist its first stock before June.

Narcissus had already posted three years of losses. The CSRC put nine such companies in a special category called "particular transfer" stocks. They only trade on Fridays.

The CSRC said it would delist such companies if they failed to produce a viable turnaround plan. It came up with new rules for delistings in February but has been reluctant to enforce them.

The Shanghai stock exchange rejected a request from Narcissus for a six-month grace period.

China's markets are often faulted for a lack of "transparency," the ability to examine how companies are performing.

A company had never been delisted in the history of China's exchanges, which opened in late 1990. Regulators were careful to point out that delisting means only that the company cannot access the capital markets. It does not mean Narcissus has gone bankrupt.

The CSRC is trying to bring its markets closer to international standards as the country moves closer to entry into the World Trade Organization.

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