On 25 June 2008, CSRC announced that it will continue to further improve the quality of corporate governance of listed companies this year.

CSRC requires listed firms to further improve their internal control system and accountability system to regulate transactions with affiliates. Listed firms are required to further reinforce their measures to prevent shareholders or actual controllers from misappropriating assets of listed firms. CSRC also stresses the importance of the statutory obligations of directors, supervisors and senior managers to safeguard the assets of a listed firm.

As stipulated, listed firms should complete rectifications on all the issues listed in their corporate governance report before 30 November 2008. Thereafter, CSRC will reject applications for equity incentives and refinancing of listed firms which have failed to complete all rectifications or still have problems in their corporate governance.

For more information, please refer to CSRC Circular No. 27 of 2008, http://www.csrc.gov.cn/n575458/n776436/n804965/n4267638/10627732.html