January 9, 2013 / 6:52 AM / 5 years ago

China tightens grip on IPO listings - sources

BEIJING, Jan 9 (Reuters) - China's securities regulator is requiring underwriters and auditors of all applicants for domestic initial public offerings to re-examine their financial statements as part of efforts to boost the quality of listed companies, four sources with knowledge of the plan told Reuters on Wednesday.

The so-called self inspections will last until the end of March, said the sources, who attended a closed door meeting between the China Securities Regulatory Commission (CSRC) and underwriters.

Following the examinations, the CSRC will randomly select from the nearly 900 IPO applicants to conducts its own checks, they said.

This could mean that China's IPO market, which has been frozen for almost three months by regulators to aid the sluggish mainland stock market, could be put on hold until the end of March, analysts said.

The CSRC has rolled out a series of measures in recent weeks to ease funding pressure on the stock market, where 882 companies are queuing to be listed, meaning companies may have to wait for up to five years to get the go-ahead for an IPO.

China has instead lowered the bar for companies to list in Hong Kong and has encouraged firms to raise money through the bond market and over-the-counter equity market.

Under the latest requirement, the CSRC will check applicants' books with a focus on areas such as forged and illegal transactions as well as loss provisions, the sources said.

CSRC will also reject IPO applicants for the Nasdaq-style ChiNext board who have reported a drop in profit in 2012 compared with a year earlier. (Reporting by Shen Yan, Zhao Hongmei and Jonathan Standing; Writing by Samuel Shen; Editing by Kazunori Takada and Richard Pullin)

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