(Yicai Global) July 31 -- China’s securities regulator has warned companies’ major shareholders, directors, supervisors, and executives that they should not sidestep restrictions on share sales by giving up stock in divorce settlements and by other means.

Shareholders, directors, supervisors, and executives of listed companies who own 5 percent or more of its shares have special responsibilities and should not circumvent equity sale rules through divestments by means such as divorce, the end of their legal person status at the firm, or company dissolution or liquidation, the China Securities Regulatory Commission said at a press briefing on July 28.

In China, the founders, major shareholders, directors, supervisors, and senior executives of firms must comply with special rules if they wish to sell shares, which include a lockup period. Any violations will be dealt with seriously in accordance with the law and regulations, the CSRC noted.

Since the start of this year, nine firms -- Forbon Technology, 360 Security Technology, Red Avenue New Materials, Kexin Communication Technologies, Todaytec Digital, Tonhe Electronics Technologies, Huitian New Materials, Secote Precision Electronic, and Maxscend Microelectronics -- have said major shareholders will hand over equity as part of divorce settlements.

In these divorce cases, the shareholders’ wives have acquired valuable stock, with some even getting all of the equity owned by their former spouses.

Editor: Futura Costaglione