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Changjiang Securities chairman under investigation by Communist Party in China

Yang Zezhu suspected of violating party discipline for ‘personal reasons’

PUBLISHED : Wednesday, 06 January, 2016, 10:26am
UPDATED : Wednesday, 06 January, 2016, 2:02pm

The chairman of mid-sized Chinese brokerage Changjiang Securities is under investigation by the Communist Party, becoming a latest senior executive in trouble after Beijing stepped up investigations into finance institutions following last summer’s stock market meltdown.

Yang Zezhu, chairman and party secretary of Changjiang Securities, is suspected of violating party discipline for “personal reasons”, the Hubei-based company said in a filing to the Shenzhen Stock Exchange on Wednesday morning.

Changjiang was informed of the investigation in a notice received on Tuesday from the party’s discipline inspection committee in Hubei province, the filing said.

China has strengthened investigation into market wrongdoing including insider trading and “malicious short selling” since July, after a rout knocked the benchmark stock index down by 30 per cent in a few weeks from a seven-year high reached in mid June.

At least a dozen senior executives of China’s biggest brokerage Citic Securities have come under investigation since September. Some were suspected of “insider trading” and “leaking inside information”.

In November, Xu Xiang, China’s most famous hedge fund manager, was arrested by police on suspicion of insider trading.

Yim Fung, chairman and chief executive of Guotai Junan International, a Hong Kong arm of giant brokerage Guotai Junan Securities, was not able to be contacted for five weeks before he reappeared in late December, after “assisting” authorities in an investigation, the company said in a filing to the Hong Kong stock exchange on December 23. It did not specify which authorities were involved.

Regulators have also felt the heat from the crackdown, Yao Gang, a vice-chairman of the China Securities Regulatory Commission, was brought under investigation and removed from his position in November. Yao’s former subordinate, assistant chairman Zhang Yujun was investigated and removed from his post two months beforehand.