SFC appoints liquidator for China Metal Recycling

First time SFC forcing a listed company into liquidation.

The Securities and Futures Commission said it has evidence suggesting that China Metal Recycling (Holdings), Ltd had overstated its financial position in its initial public offering prospectus in 2009 and its annual report for that year.

SFC alleges that this was achieved by inflating the size of the company's business and the amount of revenue generated by its major subsidiary, the commission said in a statement.

The case will be heard on Aug. 2 when the court will decide whether to continue with the appointment of the liquidator, the SFC said.

The liquidator will undertake an urgent assessment of the company and its subsidiaries in consultation with the management of the company.

The company's website describes it as the largest scrap metal recycling company in China based on 2008 revenue. China Metal Recycling shares have been suspended since January.

Its single largest shareholder, Wellrun Ltd, said it objected to the regulator's move and had appointed legal counsel to follow up on the case.