China's securities watchdog has fined Shanghai-listed Hangxiao Steel Structure 400,000 yuan (52,000 U.S. dollars) for "releasing misleading information" that saw the company's share price triple in the space of three months.

After an investigation lasting 22 working days, the China Securities Regulatory Commission (CSRC) penalized the steel firm for failing to follow proper procedures in announcing contracts for work in Angola worth 4.4 billion U.S. dollars.

Company chairman Shan Yinmu and president Zhou Jinfa have been issued warnings and each fined 200,000 yuan (26,000 U.S. dollars).

Three others -- board secretary Pan Jinshui, general manager Lu Yongjun, and securities representative Luo Gaofeng -- were each fined 100,000 yuan (13,000 U.S. dollars).

At the beginning of the year, the company entered into talks with Hong Kong-based China International Fund Ltd. concerning a housing project in Angola. The two sides signed a draft contract worth 31.3 billion yuan on February 13.

Hangxiao's chairman Shan Yinmu said at a rally on February 12 that the company's sales were expected to surge to 12 billion yuan (1.55 billion U.S. dollars) in 2007 from 1.5 billion yuan in 2005.

The CSRC said the Angolan contract was tremendously important to Hangxiao but the company had failed to follow legal procedures concerning the release of financial information and had seriously underestimated risks.

It criticized the company for underplaying the risks involved in the project.

The share price of the Zhejiang-based firm, which stood at 4.24 yuan on Feb. 12, began to rise sharply -- frequently hitting the daily limit of 10 percent -- until April 2 when the CSRC launched an investigation.

In April board secretary Pan Jinshui denied that the company had violated information release regulations.

Commission sources say this is the first case handled by the CSRC since Jan. 30 when it implemented new regulations on the release of financial information by listed companies.

Hangxiao Steel Structure published a public apology on Sunday, saying the company would learn from the case, strictly observe laws and regulations and prevent other such incidents.

The company announced it had received the written administrative penalty from the CSRC at 3:00 p.m. on Thursday.

Hangxiao's stocks rose by a maximum 10 percent again on Monday -- to hit14.88 yuan -- as news of the CSRC penalty broke.

Source: Xinhua