FRANKFURT (Reuters) - Deutsche Boerse (>> Deutsche Boerse AG) stopped wooing German listings of Chinese companies a year ago, the stock exchange operator said on Wednesday, a day after a German-listed Chinese shoemaker Ultrasonic said top managers and cash had vanished.

A spokesman for Deutsche Boerse said the decision was taken for commercial reasons, without elaborating further on why a marketing campaign in China had been discontinued.

Deutsche Boerse managers used to host marketing campaigns in China, but stopped courting smaller Chinese companies after auditors had difficulties verifying the accounting of some the smaller firms' Chinese operations, two people familiar with the companies thinking said on Wednesday.

The scandal surrounding Ultrasonic (>> Ultrasonic AG), which said most of its cash in China had disappeared, is a thorny issue for the exchange operator which is seeking to promote Frankfurt as a financial center.

It follows similar problems with Chinese companies.

German-listed Chinese manufacturer, Youbisheng Green Paper (>> Youbisheng Green Paper AG), started insolvency proceedings earlier this year after its CEO went absent without explanation. Chinese fashion group Kinghero (>> KINGHERO AG) accused its former chief executive of breach of fiduciary trust and later sought to delist.

"One can only advise investors to refrain from investments in unknown Chinese stocks," said Daniel Bauer, board member at German private investor lobby SdK.

He added that investors should consider taking auditors and underwriting banks to court. "Trying to sue the perpetrators in China seems pointless."

The Frankfurt-based exchange operator started promoting its trading platform in China in 2006 and opened a representative office in Beijing in 2008 in the hope of attracting large Chinese listings.

TELLING GOOD FROM BAD

Asked by Reuters what Deutsche Boerse plans to do to prevent similar incidents in future, the company said in a written statement all companies listed on its exchange had met strict disclosure requirements and that it was the role of the capital market to tell good from bad investments.

"(Investors buying shares in an IPO) should be capable of evaluating the opportunities and risks associated with business models as well as management's corporate governance," the exchange said.

Currently twenty-five Chinese companies are listed on the exchange, Deutsche Boerse said.

Snowbird, a Chinese maker of down bedding and clothing that is in the bookbuilding phase ahead of a Frankfurt stock market debut, on Wednesday said it was shocked by developments at Ultrasonic.

"One more black sheep that destroys all the trust-building measures we have done so far," Snowbird CEO Yan Changzai said in a statement.

The largest Chinese company by market value in Deutsche Boerse's Prime Standard trading segment is Joyou (>> Joyou AG), a maker of bathroom fixtures and fittings worth about 280 million euros ($362.68 mln). The others have market values of below 100 million euros.

(Additional reporting by Alexander Huebner and Jonathan Gould; Writing by Ludwig Burger; editing by Susan Thomas and William Hardy)

By Edward Taylor and Andreas Kröner