Understanding “Abnormal Operations” in China

In 2014, regulations outlining information disclosure requirements for Chinese companies created a List of Companies with Abnormal Operations (“the Abnormal Operations List”; 企业经营异常名录). The list includes companies that have failed to comply with information disclosure requirements.

There are four circumstances under which a company would be added to the list:

• Failure to publicize annual reports within the prescribed time frame;
• Failure to publicize other required information within the prescribed time frame;
• Publicized information conceals facts or involves falsification;
• Failure to contact the company at its publicized registered address.

PSA’s brief on this topic explains the compliance implications of a third party’s inclusion on this list.