China Probes Official at Stock Regulator After Market RoutBloomberg News
Zhang Yujun suspected of severe disciplinary violations
Investigation follows insider trading case at biggest brokage
A senior official at China’s securities regulator has been placed under investigation in the latest step authorities have taken to punish those they say contributed to a $5 trillion stock rout.
Zhang Yujun, an assistant chairman for the China Securities Regulatory Commission, is being investigated for “severe disciplinary violations," the Communist Party’s top disciplinary body said in a statement on its website. Zhang, 52, is one of three assistant chairmen at the CSRC and previously served as general manager of both the Shanghai and Shenzhen stock exchanges.
The statement by the Central Commission for Discipline Inspection provided no details on the nature of the investigation. The CSRC declined to comment.
The investigation comes as the government vows measures against "malicious" short sellers and attempts to "purify" capital markets. On Tuesday, authorities announced a probe into Cheng Boming, the president of Citic Securities Co., China’s biggest brokerage, over allegations of "insider trading."
“The government is sending a strong signal,” said Ronald Chan, chief executive at Partners Capital International in Hong Kong. “In a sense, they are saying that the government won’t allow any profit taking activities while they are supporting the market. Stronger policies and a clean-up of market irregularities is under way.”
In December, CSRC said its head of investor protection bureau, Li Liang was being probed for alleged law and discipline violations. Four executives at Citic recently admitted to insider trading, the official Xinhua News Agency reported last month. A journalist from business magazine Caijing, whose report was alleged to have caused market panic, was also targeted.
The CSRC’s Zhang became an assistant chairman in September 2012. He is a native of Sichuan province and holds PhD degrees in economics and law.
In addition to regulatory actions and investigations, the government has cut some of the leverage that fueled the stock boom and intervened in the market by buying shares.
The Shanghai Composite Index jumped 4.9 percent to 3,152.26 at the close of the trading day, halting a two-day, 6.1 percent loss. Only 12 stocks out of the more than 1,100 traded in Shanghai fell as trading volumes slumped 28 percent below the 30-day average.
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