Chinese firm fined for false disclosure

South Korea's bourse operator imposed a heavy penalty on a Chinese company traded on the country's stock market on Wednesday, for a false regulatory filing that could lead to its delisting.

The Korea Exchange designated China Ocean Resources Co. an "unfaithful disclosure" corporate and placed it under a special watch. It was blacklisted as what the KRX calls an "administrative issue." 

The KRX also slapped a fine of 200 million won ($176,000) on the company, the heaviest fine levied on a listed firm here.

The Hong Kong-based company announced in April that it was sued by a partner firm for failing to pay back loans and interest. It added that 30 percent of its subsidiary shares were sequestrated but the disclosure turned out to be false.

It's also alleged to have manipulated online photos of its ships to make investors believe it has more assets.

Its stock trading in the main KOSPI market has been suspended since April 25 and will resume on Friday with the dishonorable title of administrative issue.

If the firm receives 15 or more penalty points within the next one year, it could be delisted from the South Korean stock market, KRX officials said, citing current rules.

"We took a considerably strong punitive measure this time, concluding that it's a grave issue damaging the credibility of the equity market," an official said. (Yonhap)