China will focus on cases of stock price manipulations via disclosure of false information and insider trading in cracking down on illegal activities in the securities market, said sources with the China Securities Regulatory Commission (CSRC).

The commission said that company violators in the past had tended to exaggerate profits, but a new trend saw companies trying to manipulate their stock price by disclosing false information, and insider trading.

The recent case of Hangxiao Steel -- which saw its share price soar after claims of a huge overseas contract -- was cited.

The commission was looking into detection mechanisms to be operated in cooperation with local bureaus and stock exchanges, said an unnamed CSRC official.

The commission pledged to closely monitor the share price fluctuations of listed companies, and said it would investigate suspicious variations.

Stocks of companies that fluctuate suspiciously may be suspended until proper information is disclosed, said the official.

The commission issued a separate notice instructing listed companies to verify their information disclosure system so as to ensure the truth, accuracy, completeness, timeliness and fairness of disclosed information.

CSRC said in a Friday announcement that Hangxiao Steel had violated the country's information disclosure rules with its overseas contract claim.

(Xinhua News Agency April 30, 2007)