Shenzhen bourse cites Huayuan Industrial for misleading announcements

SHANGHAI (AFX-ASIA) - The Shenzhen Stock Exchange has issued a public condemnation of Huayuan Industrial (Group) Co Ltd and its former chairman Chen Ping after the company made misleading public announcements.

	    In an announcement, the stock exchange said the company published several announcements between July-November 2000 -- a period of unusual volatility in the company's share price -- saying Huayuan Industrial has made no progress in plans to undergo asset restructuring, and that the company's largest shareholder has no plan to sell its stake.

	    However, on Oct 24, the company announced that its largest shareholder was to sell its 13.61 pct stake in the company to Sahe Group.

	    Before this announcement, Chen Ping, then chairman of Huayuan Industrial and president of the company's largest shareholder, had been in contact with Sahe Group, meaning that the previous announcements had been seriously untrue, the stock exchange said.

	    The stock exchange also said Huayuan Group published announcements on Feb 15, 21 and 27 of this year saying it would report a net loss in full-year 2000.

	    However, the company's annual report, published on April 30, said the company had in fact earned a net profit in 2000 as a result of debt restructuring.

	    On May 8, the company received an order from the Ministry of Finance to adjust its income from debt restructuring, in accordance with the relevant MoF regulations, and republish its annual report.

	    These misleading announcements caused unusual volatility in the company's share price, the stock exchange said.

	    Huayuan Industrial's A-shares last closed at 14.44 yuan.

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