Government inquiry continues into China’s biggest brokerages

BEIJING - Government attempts to clean up China’s financial sector have continued with investigations into the country’s biggest brokerage, CITIC Securities, and its smaller rival, Guosen Securities. Both brokerages say the China Securities Regulatory Commission (CSRC) has launched an investigation into alleged violations of securities supervision and management regulations.

In separate filings on the Shanghai and Shenzhen stock exchanges, CITIC and Guosen say they will “co-operate fully with the investigations” and that there will be “no impact” on their current operations.

Earlier, the Securities Association of China (SAC) said CITIC had overstated the value of some of its financial derivatives by more than RMB 1 trillion (US$156.51 billion) in its monthly reports from April to September. SAC said it found inaccuracies in the brokerage’s statistical reports on over-the-counter equity swap deals, some of which were carried out during the summer’s stock market crisis.

Last in August, four senior executives at CITIC were reported to have confessed to insider trading during an investigation into the market crash.  www.webershandwick.cn (ATI).