Alleged insider trading investigated
Print Edition
SEVERAL senior executives of China’s two biggest trainmakers are being investigated on allegations of insider trading before the announcement of a merger plan, media reported yesterday.
The China Securities Regulatory Commission has opened an inquiry into the senior executives of China CNR Corp and CSR Corp who have been found to have traded in shares of the two companies before the merger plan was announced, the 21 Century Business Herald said yesterday, citing unnamed sources from the companies.
An internal inspection report released along with the merger plan by the companies said 25 people — six with CSR and 19 with CNR — have bought or sold shares of the two companies in the six-month period prior to the trading suspension of the two trainmakers on October 27.
They include CNR Chairman Cui Dianguo, President Xi Guohua, secretary of the board of directors Xie Jilong, and Vice President and Chief Financial Officer Gao Zhi, as well as their relatives.
The report said Cui bought 15,000 shares of CSR at 5.14 yuan (83 US cents) and sold 50,000 shares at 5.96 yuan between April 26 and October 26.
Gao and his spouse and child bought 1.97 million shares in CSR and sold 1.79 million shares during the period, the most among all the suspects.
Shares of both companies surged by the daily limit of 10 percent for six straight days after trading was resumed on December 31 when the plan to merge into a US$26 billion company to compete with global giants such as Canada’s Bombardier and Germany’s Siemens for rail deals was disclosed.
Cui and Xi said their transactions were based on their judgment of the value of CSR shares and they did not use insider trading, according to the report.
Most of the suspects have denied charges of insider trading and argued that they didn’t have any knowledge about the merger when they made the transactions.
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