On Monday, the Shanghai Stock Exchange said it has delisted a company for violating the rules on information disclosure. As China moves to ameliorate its groaning reputation of its stock markets, the SSE claimed this is the first time they delisted a company and will continue to crack down market irregularities.

In 2014, the China Securities Regulatory Commission updated delisting regulations after the SSE revised its own exchange rules. Under the rules, companies who were transferred to the public security for major disclosure failure are forced to delist, reports South China Morning Post.

Zhuhai Boyuan inflated deposits and equities of shareholders between 2010 to 2014. According to China Daily, an investigation found that Zhuhai Boyuan Investment's forged bank acceptance bills to cover up 380 million yuan or $58.7 million in earnings was "very grave".

Shares of Zhuhai Boyuan were then suspended from trading by the SSE on May 2015. Before the investigation started, the company had been trading with an ST or "Special Treatment" prefix, which was aimed to notify investors to a prospect of delisting for companies posting losses for three consecutive financial years.

Reuters reported that analysts blamed a "lax regulatory system" for generating a brisk market in listed shell companies that could be acquired through reverse takeovers. New rules aimed at wiping out the bourses of underperforming companies then came into effect in 2014. However, until now the few companies that have delisted have done so because of business performance issues.

Market manipulation and dishonest accounting were endemic among listed Chinese companies. China Securities Regulatory Commission believes that the zero tolerance of major violations would encourage listed companies to disclose information in accordance with the rules and could help shield the investors' legitimate rights and interest while promoting stability in the development of the capital market.

The delisting was commended by investors who believe that such move will restore investor confidence.