China's Shenzhen bourse delists 2 firms under new rules

SHANGHAI Mon Dec 24, 2012 8:10pm EST

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SHANGHAI Dec 25 (Reuters) - China's Shenzhen Stock Exchange will delist two loss-making companies, the first delistings under tighter rules for underperforming firms aimed at boosting confidence in the sluggish equities market.

Software producer Powerise Information Technology Co and real estate firm Jiangsu Chinese Online Logistics Co will be delisted next week in accordance with the new rules announced in June, the exchange said in a statement late on Monday.

Trading in Powerise has been suspended since May 2007 after the firm made three consecutive losses. Jiangsu Chinese Online has been suspended since May 2006 for the same reason.

According to the new rules, companies which post three consecutive years of losses will be delisted unless they pass a review of their restructuring plans.

The Shenzhen exchange said it had rejected the restructuring plans from Powerise and Jiangsu Chinese Online.

China has in recent years tightened performance standards for listed companies as part of sweeping reforms intended to improve the health of its stock markets. (Reporting by Lu Jianxin and Kazunori Takada; Editing by Michael Perry)

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