China Everbright boss steps down following market chaos
Company president pays the price for trading blunder that was the trigger for market chaos in the Shanghai stock market last week
The chief executive and president of China Everbright Securities, which was responsible for the chaotic trading on the Shanghai stock market on Friday, has quit, in an apparent show of Beijing's determination to resolve the crisis.
The board accepted the resignation of Xu Haoming, Everbright said in a filing to the Shanghai Stock Exchange yesterday. The company's chairman, Yuan Changqing, will take charge of daily operations.
The punishment for just one brokerage might not be enough to convince investors
Everbright did not elaborate on the reasons for Xu's resignation, but sources close to the China Securities Regulatory Commission (CSRC) said it was a sign that the regulator was taking a tough stance on brokerages, requiring them to strengthen internal controls while playing a stabilising force in a volatile market.
The trading mishap comes at a time when the mainland market is already grappling with a crisis of confidence and the government is looking to it to support the new round of economic reforms.
The securities markets will be a crucial funding channel for the government's ambitious urbanisation programme, which could cost 40 trillion yuan (HK$50 trillion) to deliver over the next decade.
The chaotic trading on Friday, with its steep losses for some investors, threatened to be a liability for the new leadership's potential reform measures.
It was the first market crisis since Xiao Gang took over as chief securities regulator in March. As CSRC chairman, Xiao is charged with bolstering investor confidence to help companies raise much-needed capital as Beijing seeks to wean the economy away from state control and make it more market-driven.