Confessions Made by Four Executives at Citic, Xinhua Says

Updated on
  • Chinese state media report on probes in securities industry
  • Caijing journalist also reported to have made confession

Four executives of Citic Securities Co., the nation’s largest brokerage, a journalist at business magazine Caijing and a staff member at the securities regulator all confessed to alleged crimes, the state-run Xinhua News Agency said.

The Citic officials, including managing director Xu Gang, admitted insider trading, the news service said. A Citic press officer declined to comment.
The brokerage’s shares fell in Hong Kong to the lowest since May 2014, sinking 4.5 percent as of 10:03 a.m. local time.

After a $5 trillion stock rout, Chinese officials trying to stabilize the market are mixing measures such as state-mandated share purchases with a campaign highlighting their efforts to crack down on alleged market manipulation. Over the weekend, the China Securities Regulatory Commission told 50 brokerages to contribute an additional 100 billion yuan ($15.7 billion) to the rescue effort, people familiar with the matter said. 

Wang Xiaolu, a journalist for Caijing, admitted wrongly reporting on July 20 that the CSRC was studying an exit from support measures, causing panic and confusion, Xinhua said. He is cooperating in the hope of a reduced punishment, it added. Two calls to Caijing went unanswered on Monday morning. The magazine previously said it would cooperate with the authorities.

Liu Shufan, a CSRC staff member, admitted making millions of yuan from insider trading in shares of two companies last year and also to forging documents in connection with an apartment purchase, Xinhua said. No comment was immediately available from the CSRC.

The three other Citic executives besides Xu Gang are executive committee member Liu Wei, head of financial business Fang Qingli and alternative investments head Chen Rongjie, Xinhua said.

All six people were detained on Aug. 30, the news agency said.

— With assistance by Jun Luo, and Aipeng Soo

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