15 listed firms found to have control system defects

An investigative report has found that 15 Chinese companies have defects in their internal control system.

The report looked at companies that are listed both in the domestic and overseas markets.

Among them, Shandong Xinhua Pharmaceutical Co Ltd was found to have a "large defect" - its practice of offering an excessive line of credit to customers, which has led to losses.

Meanwhile, the Bank of Communications Ltd was encouraged to lower its loan to deposit ratio.

Most of the other companies among the 15 cited were found to have "general defects", such as imperfect information systems or corporate structures.

The report, which was filed by five ministries, including the Ministry of Finance, China Securities Regulatory Commission, looked into 67 Chinese companies that are listed both on the mainland's A-share market and on overseas exchanges in Hong Kong, New York, London and Singapore.

Fifty out of the 67 companies had had more than 10 billion yuan ($1.58 billion) in revenue from their main businesses in 2011. Their total revenue that year was 12 trillion yuan, an amount equal to a quarter of the country's total GDP in 2011.