Sep
4
CSRC fines firms for ‘illegal’ trade
Filed Under CH
China’s market regulator has fined three companies — including Hundsun Technologies Inc (恒生電子), which has ties to Alibaba Group Holding Ltd (阿里巴巴) — a combined 453 million yuan (US$71.6 million) for conducting “illegal securities business,” which has been blamed for volatility in the country’s plunging markets.
The move comes as Chinese authorities mount broad attempts to shore up share prices after the benchmark Shanghai index plunged 30 percent in three weeks from mid-June following a debt-fueled rally, which helped the market rise 150 percent in a year.
The China Securities Regulatory Commission (CSRC) also confiscated a total of 151 million yuan in “illegal income” from Hangzhou Hundsun Network Technologies Service Co (杭州恆生網絡技術), Shanghai Mecrt Corp (上海銘創軟件) and Hithink RoyalFlush Information Network Co (浙江核新同花順網絡信息), the CSRC said in a statement.
The three firms developed systems that 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 statement said.
They “severely disrupted security market order,” it added.
Earlier this week, China’s main state broadcaster paraded a financial journalist who “confessed” to causing the stock market “great losses” as authorities seek to rein in the rout.
Wang Xiaolu (王曉璐), a journalist at respected business magazine Caijing, was held after writing a story in July saying the regulator was studying plans for government funds to exit the market.
The CSRC started investigating the three companies in July and its statement late on Wednesday said it also fined and warned their top executives personally.
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