CHINA Law and Practice Contributed by: Kevin Wang, Global Law Office
quarterly reports) and interim financial reporting requirements. Directors/Officers Responsibilities in Financial Reporting The contents of the periodic report shall be examined and approved by the board of direc - tors. The directors and officers of the company shall sign written confirmation opinions on the periodic report, and the board of supervisors shall submit written review opinions on the peri - odic report. If the directors or supervisors are unable to guar - antee the authenticity, accuracy and complete - ness of the periodic report or have objections, they shall vote against or abstain from voting. Directors and officers are not absolutely relieved of their responsibility if they cannot closely fol - low the principle of prudence during the report China securities regulations also strengthen the gatekeeper responsibility of intermediary institu - tions, which generally include securities com - panies and their personnel as sponsors and/or underwriters, securities service agencies, law firms, accounting firms, and asset evaluation agencies. In practice, shareholder class action lawsuits can be filed against the company, directors, officers and intermediary institutions for their breach of duties in cases of false statements, breach of promises, insider trading and manipulation of the market. 6.2 Disclosure of Corporate Governance Arrangements There are some requirements for publicly traded companies to disclose their corporate govern - preparation and disclosure. Gatekeeper Responsibilities
ance arrangements in the midterm report and annual report. In the midterm report, a publicly traded company shall disclose its corporate governance arrange - ments, including: • the annual shareholder meeting and interim shareholder meetings held during the report - ing period; • the removal of directors, supervisors and officers, as well as the reasons for doing so, during the reporting period; • whether the dividends distribution plan and the plan for conversion of capital reserve fund to share capital comply with the articles of association and provisions for review pro - cedure, and have adequately protected the legitimate interests of the minority investors, and whether the independent directors have issued opinions; and • the implementation of an equity incentive plan, employees’ stock holding plan or other incentive measures for employees during the reporting period. In addition to the arrangements mentioned above, a publicly traded company shall also disclose the following in its annual report: • the measures that the controlling shareholder and actual control persons take to guarantee the independence of the company; • the situation of engagement in business that is identical or similar to the company that is taken by the controlling shareholder, actual control persons and other enterprises con - trolled by them; • the implementation of and changes to the arrangements on difference in voting rights during the reporting period;
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