Court reveals more details of Gome founder's crimes
By Ding Yining |
May 23, 2012, Wednesday
|
Print Edition
Print Edition
THE Supreme People's Court yesterday revealed more details about the insider trading case that saw Chinese home appliance tycoon Huang Guangyu jailed in 2010.
SPC spokesman Sun Jungong told a press conference that Huang, as the major shareholder of Shenzhen-listed Beijing Centergate Technologies (Holding) Co Ltd, had instructed accomplices to open dummy trading accounts and to buy the company's stock before statements of major transactions and corporate restructuring were issued.
In three such insider deals, Huang acquired more than 140 million shares with a value of 1.8 billion yuan (US$286 million) and profits of nearly 400 million yuan.
The court revealed the details as it announced moves to step up the fight against insider trading and corporate bribery.
Sun cited the case of Huang, former chairman of Chinese electronics retail giant Gome, as an example of insider trading that had "seriously jeopardized the security of the capital market and economic and social order."
Judicial interpretation
China is to introduce a new judicial interpretation on June 1 to clarify the rules in handling insider trading cases, Sun told reporters in Beijing.
He said Huang had asked a subordinate to open stock trading accounts ahead of the announcement of Beijing Centergate's acquisition of Beijing Pengrun Real Estate Development Co during July and August of 2007.
A total of 79 stock accounts were set up using other people's identities, and Huang's wife Du Juan helped manage these accounts. She was told by Huang to buy more than 104 million shares of Beijing Centergate and gained more than 306 million yuan.
Asset restructuring
Earlier that year, between April and June, Huang also bought 93.1 million yuan worth of Beijing Centergate's shares ahead of the listed firm's asset swap with Beijing Pengtai Investment Co. Huang was involved in the planning and decision making of the asset restructuring at that time.
Xu Zhongmin, a former chairman of Beijing Centergate, also received instructions from Huang to buy 414 million yuan worth of Beijing Centergate's shares in August and September 2007.
Huang was jailed for 14 years in 2010 for insider trading and other charges including illegal business dealings and corporate bribery. He was also fined 600 million yuan and 200 million yuan of personal assets were forfeited.
The number of insider trading cases rose to 11 in 2011 from only one in 2007, Sun said yesterday. By the end of last year, courts in the country had dealt with a total of 22 insider trading cases.
The new judicial interpretation clarifies the definition of an insider, which refers to an individual, not an institution, who is either a senior manager or major shareholder - one holding more than a 5 percent stake - of a listed company or its affiliates, an employee of a security firm involved with trade or an official with the security watchdog.
It also defines people who obtain confidential information through illegal means and how investigators should define the act of insider trading.
In addition, the interpretation explains that an insider securities transaction with a value of more 500,000 yuan constitutes a grave crime.
A futures transaction with a value of more than 300,000 yuan and a deal yielding profits of more than 150,000 yuan will also be considered grave crimes.
These stipulations are designed to maintain the order of the capital market and protect retail investors' interest, Sun said.
SPC spokesman Sun Jungong told a press conference that Huang, as the major shareholder of Shenzhen-listed Beijing Centergate Technologies (Holding) Co Ltd, had instructed accomplices to open dummy trading accounts and to buy the company's stock before statements of major transactions and corporate restructuring were issued.
In three such insider deals, Huang acquired more than 140 million shares with a value of 1.8 billion yuan (US$286 million) and profits of nearly 400 million yuan.
The court revealed the details as it announced moves to step up the fight against insider trading and corporate bribery.
Sun cited the case of Huang, former chairman of Chinese electronics retail giant Gome, as an example of insider trading that had "seriously jeopardized the security of the capital market and economic and social order."
Judicial interpretation
China is to introduce a new judicial interpretation on June 1 to clarify the rules in handling insider trading cases, Sun told reporters in Beijing.
He said Huang had asked a subordinate to open stock trading accounts ahead of the announcement of Beijing Centergate's acquisition of Beijing Pengrun Real Estate Development Co during July and August of 2007.
A total of 79 stock accounts were set up using other people's identities, and Huang's wife Du Juan helped manage these accounts. She was told by Huang to buy more than 104 million shares of Beijing Centergate and gained more than 306 million yuan.
Asset restructuring
Earlier that year, between April and June, Huang also bought 93.1 million yuan worth of Beijing Centergate's shares ahead of the listed firm's asset swap with Beijing Pengtai Investment Co. Huang was involved in the planning and decision making of the asset restructuring at that time.
Xu Zhongmin, a former chairman of Beijing Centergate, also received instructions from Huang to buy 414 million yuan worth of Beijing Centergate's shares in August and September 2007.
Huang was jailed for 14 years in 2010 for insider trading and other charges including illegal business dealings and corporate bribery. He was also fined 600 million yuan and 200 million yuan of personal assets were forfeited.
The number of insider trading cases rose to 11 in 2011 from only one in 2007, Sun said yesterday. By the end of last year, courts in the country had dealt with a total of 22 insider trading cases.
The new judicial interpretation clarifies the definition of an insider, which refers to an individual, not an institution, who is either a senior manager or major shareholder - one holding more than a 5 percent stake - of a listed company or its affiliates, an employee of a security firm involved with trade or an official with the security watchdog.
It also defines people who obtain confidential information through illegal means and how investigators should define the act of insider trading.
In addition, the interpretation explains that an insider securities transaction with a value of more 500,000 yuan constitutes a grave crime.
A futures transaction with a value of more than 300,000 yuan and a deal yielding profits of more than 150,000 yuan will also be considered grave crimes.
These stipulations are designed to maintain the order of the capital market and protect retail investors' interest, Sun said.
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