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Brokerage exec gets 4 years in jail
By Winny Wang |
January 10, 2009, Saturday
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Print Edition
Print Edition
THE former president of China's sixth-largest brokerage, Dong Zhengqing, was sentenced yesterday to four years in prison for leaking inside information involving a company's back-door listing.
The Tianhe District People's Court in Guangzhou also fined him 3 million yuan (US$438,821) but acquitted him of an insider trading charge.
Dong was accused of tipping off his younger brother Dong Dewei and former classmate Zhao Shuya about Guangfa Securities' back-door listing of Yan Bian Road on the Shenzhen Stock Exchange in 2006. Speculation over the back-door listing sent Yan Bian Road shares rising from 2.86 yuan to 8.06 yuan between March and June 3.
Dong Dewei earned more than 50 million yuan and Zhao earned more than 1 million yuan as a result of knowing the sensitive inside information in advance.
The court sentenced Dong Dewei to a four-year jail term and fined him 25 million yuan for insider trading, and his illicit gains of 28 million yuan were seized. Zhao was sentenced to 21 months in jail and fined 1 million yuan by the court for insider trading, and his 1 million yuan in illicit gains was seized.
"The result is expected to positively effect Guangfa Securities' back-door listing process," said Zhang Qi, an analyst at Haitong Securities Co. The back-door listing has been suspended since Dong's case was exposed.
The three defendants said they would file an appeal, according to Caijing Magazine.
In an earlier trial, Dong Zhengqing insisted he was not involved in the listing process and said on June 2, 2006 that he was on a business trip to Yunnan Province.
The Tianhe District People's Court in Guangzhou also fined him 3 million yuan (US$438,821) but acquitted him of an insider trading charge.
Dong was accused of tipping off his younger brother Dong Dewei and former classmate Zhao Shuya about Guangfa Securities' back-door listing of Yan Bian Road on the Shenzhen Stock Exchange in 2006. Speculation over the back-door listing sent Yan Bian Road shares rising from 2.86 yuan to 8.06 yuan between March and June 3.
Dong Dewei earned more than 50 million yuan and Zhao earned more than 1 million yuan as a result of knowing the sensitive inside information in advance.
The court sentenced Dong Dewei to a four-year jail term and fined him 25 million yuan for insider trading, and his illicit gains of 28 million yuan were seized. Zhao was sentenced to 21 months in jail and fined 1 million yuan by the court for insider trading, and his 1 million yuan in illicit gains was seized.
"The result is expected to positively effect Guangfa Securities' back-door listing process," said Zhang Qi, an analyst at Haitong Securities Co. The back-door listing has been suspended since Dong's case was exposed.
The three defendants said they would file an appeal, according to Caijing Magazine.
In an earlier trial, Dong Zhengqing insisted he was not involved in the listing process and said on June 2, 2006 that he was on a business trip to Yunnan Province.
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