The underwriting, accounting and legal agencies involved in Wanfu Botechnology's IPO have clearly failed to carry out their responsibilities of due diligence and will face investigation, according to the CSRC.

While the investigation is yet to be completed, the responsibilities of those intermediaries are obvious. Given their professional capabilities, it is impossible that they would not have found the financial loopholes in the company's books at the pre-listing stage.

Wanfu's underwriter was Ping An Securities, the securities arm of China's second-largest insurer Ping An Insurance Group, which was involved in another fraud case. The listing application of Hunan Shengjingshanhe Distillery Stock Co Ltd was cancelled by the CSRC after it was found to have whitewashed its books.

Given its poor record, Ping An Securities should receive harsh punishments.

The investigation should not stop there, however.

Based on open information, altogether seven members of the CSRC's stock listing approval committee participated in the approval procedures for Wanfu Biotechnolgy. They are all senior accounting and legal professionals and it is hard to believe they were not able to spot the financial problems in the company's books. So the public is eager to learn why they gave the green light to Wanfu Biotechnology's application.

If the stock listing approval committee cannot clarify its role in the process of listing approval, it is reasonable to suspect that many other companies may also have listed fraudulently.

The Chinese stock market has long been accused of irregularities, and to clean it up harsher punishments must be meted out to companies that falsify their financial data and those that enable them. Punishments must be made harsh enough so that the price of cheating is too high to afford.

At the same time the regulators themselves must become more accountable for their role in approving companies to be listed.

The author is a senior writer with China Daily.