LINE

Text:AAAPrint
Economy

Probes prompt drop in brokerage shares

1
2015-08-27 09:22Global Times Editor: Li Yan

Firms suspected of violating trading rules

Shares in five Chinese brokerages fell on Wednesday after they were placed under investigation for suspected violations of stock trading rules, as part of the authorities' efforts to stabilize the market.

Police are investigating eight employees of CITIC Securities Co, the country's largest brokerage in terms of market value, for suspected illegal securities trading, the Xinhua News Agency reported late on Tuesday.

The investigations come at a time when China's stock market has plunged by more than 40 percent since peaking in mid-June.

CITIC Securities said Wednesday that it had not received any notice about the investigation, and the company is making enquiries regarding the matter, according to a statement it filed with the Hong Kong stock exchange.

The company's businesses are all "operating normally," the statement said.

Shares in CITIC Securities fell 2.41 percent in Hong Kong and 2.51 percent in Shanghai on Wednesday.

Another four brokerages - Haitong Securities, Founder Securities, Huatai Securities and GF Securities - said in separate statements late Tuesday that they are being investigated by the China Securities Regulatory Commission (CSRC) on suspicion of failing to review and verify the identity of their clients, as required by market rules. Shares in the four firms fell by between 0.79 and 4.13 percent on Wednesday.

The investigations have also extended to government officials and journalists.

An employee and a former employee of the CSRC, China's top securities regulator, are being investigated on suspicion of insider trading and forging official documents and seals, Xinhua reported.

A reporter at Caijing magazine is being investigated on suspicion of colluding with others to fabricate and spread false securities and futures trading information, the Xinhua report said.

Caijing said in a statement on Wednesday that the police summoned its reporter Wang Xiaolu on Tuesday night, but said the magazine has not received any notice from the police and does not know the reason behind Wang's case.

Wang wrote a news report published by the magazine on July 20, which said the CSRC was considering an exit from a stock purchase program intended to support the A-share market.

Zhang Xiaojun, a CSRC spokesman, said in a statement later that day that the report was not true, adding that the regulator would continue to stabilize the market and support investor confidence, as well as avoiding systemic risks.

Caijing said Wednesday that it believed objective reporting helps with the sound development of the securities market, and said it would cooperate with the authorities in an investigation.

The investigations have sent a clear signal that the authorities have found evidence of wrongdoing in the securities market, Xinhua said in a commentary published Wednesday.

"China's securities market should not be a place in which rules do not apply, and anyone or any organization that violates the law will be punished," the commentary said. "We believe more suspects and criminal activities will be found as the investigations continue."

Chinese police and the securities regulator have launched investigations into malicious short-selling of stocks and futures since early July amid China's stock market plunge, and the probes have targeted several trading companies and technology firms.

"The investigations underscore the authorities' determination to stabilize the stock market and boost investors' confidence," Zhang Yuanzhong, a lawyer at Beijing Wentian Law Firm, told the Global Times Wednesday.

The recent stock market plunge also exposed problems in China's securities market, and the upcoming amendment to the Securities Law should be more effective in curbing illegal practices and in protecting small investors' interests, he said.

  

Related news

MorePhoto

Most popular in 24h

MoreTop news

MoreVideo

News
Politics
Business
Society
Culture
Military
Sci-tech
Entertainment
Sports
Odd
Features
Biz
Economy
Travel
Travel News
Travel Types
Events
Food
Hotel
Bar & Club
Architecture
Gallery
Photo
CNS Photo
Video
Video
Learning Chinese
Learn About China
Social Chinese
Business Chinese
Buzz Words
Bilingual
Resources
ECNS Wire
Special Coverage
Infographics
Voices
LINE
Back to top Links | About Us | Jobs | Contact Us | Privacy Policy
Copyright ©1999-2018 Chinanews.com. All rights reserved.
Reproduction in whole or in part without permission is prohibited.