Firms fined for illegal securities business
Print Edition
CHINA’S market regulator has fined three companies, including Alibaba-linked Hundsun, a combined 453 million yuan (US$71 million) for conducting “illegal securities business,” which has been blamed for volatility on the plunging markets.
The moves come as authorities attempt to shore up share prices after the Shanghai index plunged 30 percent in three weeks from mid-June following a debt-fueled rally which sent it up 150 percent in a year.
The continuing falls come alongside worries about slowing growth in the world’s second-largest economy that sent shudders through global bourses.
The China Securities Regulatory Commission also confiscated a total of 151 million yuan in “illegal income” from Hangzhou Hundsun Network Technologies Service Co, Mecrt Corp, and Hithink RoyalFlush Information Network Co.
The three firms developed systems which enabled investors to trade stocks without giving their real identities, allowing the firms to profit by “knowingly” providing the software to unqualified clients, the CSRC said.
They “severely disrupted security market order,” it added.
Earlier this week, a journalist with business magazine Caijing “confessed” to causing the stock market “great losses” as authorities sought to rein in the rout.
Wang Xiaolu was held after writing that the regulator was studying plans for government funds to exit the market.
The CSRC started investigating the three companies in July, and its statement said it also fined and warned their top executives.
E-commerce giant Alibaba’s affiliate Ant Financial — a financial services provider focused on serving small companies — holds a 20 percent stake in Hundsun Network’s parent company Hundsun Technologies.
Hundsun Technologies closed down 3.14 percent on the Shanghai exchange and Hithink RoyalFlush Information Network gained 2.19 percent in Shenzhen trading on Wednesday.
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