Beijing announces confessions after probes into market plunge

BEIJING — Chinese state media yesterday announced a slew of confessions after investigations into recent stock market gyrations, including from a reporter who admitted to spreading false information that caused panic and disorder.

An official from China’s securities regulator and four senior executives from China’s largest brokerage, CITIC Securities, confessed to insider dealing and other crimes, Xinhua news agency reported.

China is trying to boost its stock markets, which have plunged nearly 40 per cent since the middle of June on concerns over the country’s slowing economy and an unexpected devaluation of the yuan on Aug 11.

Among a number of measures implemented, authorities have cracked down on the fabrication of market information, alleged malicious short-selling and other strategies seen as hampering a recovery.

Xinhua said that Mr Wang Xiaolu, a reporter at the respected Caijing business magazine, admitted to wrongly reporting on July 20 that the China Securities Regulatory Commission (CSRC) was studying an exit from support measures, causing panic and confusion.

Wang confessed to writing about the Chinese stock market based on “hearsay and his own subjective guesses” that “inflicted huge losses on the country and investors”. He is cooperating in the hope of a reduced punishment, Xinhua added.

Caijing could not be reached for comment yesterday. The magazine had previously said it would cooperate with the authorities.

Chinese state media often publish confessions of those detained in high-profile cases before they are tried in court, a practice that rule of law advocates say violates the rights of the accused to due process.

Xinhua also reported that Mr Liu Shufan, a CSRC staff member, had confessed to insider trading, forging documents in connection with an apartment purchase and using his position to boost a listed company’s share price in return for several million yuan in bribes. CSRC could not be reached for comment.

Xinhua added that CITIC Securities managing director Xu Gang; executive committee member Liu Wei; head of financial business Fang Qingli; and head of alternative investments Chen Rongjie had confessed to insider trading. A CITIC Securities spokesman declined to comment.

On Sunday, the brokerage said several senior managers had been asked to assist with a public security investigation and that the company was cooperating with authorities.

It added its business is operating normally and that it has sufficient liquidity.

Meanwhile, Chinese authorities have punished 197 people in a recent crackdown on online rumours, Xinhua reported, citing the Public Security Ministry.

These included those who alleged that a man committed suicide because of the country’s stock market plunge and those who circulated an inflated death toll in the Tianjin explosions.

Among the rumours circulated were that “at least 1,300 people were killed in the Tianjin blasts.”

The death toll in the Aug 12 explosions at warehouses for hazardous chemicals in the port city so far stands at 150.

The ministry was also reported as saying some of the people were punished for spreading seditious rumours about the upcoming commemoration of the 70th anniversary of the end of World War II, which China marks on Thursday with a big military parade through Beijing. AGENCIES