Police summon 11, including financial journalist, to assist investigation into illegal stock market activities
Print Edition
CHINESE police have summoned 11 people including a financial journalist to assist their investigations into illegal stock market activities, as the government targets volatility on the exchanges.
The government launched an unprecedented rescue package as the stock market plummeted 30 percent from mid-June, which included a crackdown on short-selling and funding a state company to buy shares on its behalf.
Authorities have accused a Caijing magazine journalist of colluding with others to manufacture and spread false information on securities and futures trading, Xinhua news agency reported.
The magazine confirmed journalist Wang Xiaolu had been subpoenaed by police but defended his actions.
A senior executive with CITIC Securities Co, one of China’s largest brokers, and several officials with the top securities regulator are among those being investigated for suspected market violations.
Police are probing eight employees of state-owned CITIC Securities, including one surnamed Xu, over “illegal securities trading,” Xinhua reported.
People linked to the China Securities Regulatory Commission are also under investigation for suspected insider trading and forging official document stamps while employees of the Caijing business magazine are being investigated on suspicion of spreading false trading information, Xinhua said, without giving further details.
Xu was identified by Caixin magazine yesterday as the broker’s managing director Xu Gang. It also named Liu Shufan, a director of the CSRC’s issuing department, and a former staff member, Ouyang Jiansheng, as among those under investigation.
CITIC Securities said it had received no notice of a probe, adding that its businesses were operating as normal.
Caijing’s Wang wrote a story in July saying the securities regulator was studying plans for government funds to exit the market.
The CSRC quickly denied the Caijing story and labeled it “irresponsible,” AFP reported.
But Caijing said yesterday it “defended journalists’ rights to do their duty under the law.”
The business magazine said it believed objective reporting improved market transparency and promoted the healthy development of the securities market.
Earlier this month, the CSRC said the China Securities Finance Corp — a state-backed company tasked with buying shares — would continue to have a role for a “number of years,” but would only enter the market during times of volatility.
The CSRC comments were widely seen by investors as a signal of less government intervention in the stock market.
The investigations will help “create a positive environment in China’s stock market and give the market a health and stable future,” Xinhua wrote in a commentary.
Meanwhile, four Chinese securities firms — Haitong Securities Co, GF Securities Co, Huatai Securities Co and Founder Securities Co — said they are being investigated by the CSRC for suspected violations of rules on confirming the identities of clients.
In separate statements to the Shanghai and Hong Kong exchanges they said they had received notice of the investigations on Monday.
Haitong said that it would “fully cooperate with the investigation and will strictly perform obligation on information disclosure in accordance with regulatory requirements.” The other brokers expressed similar sentiments.
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