China’s securities watchdog ‘hard on the digital trail of financial crocodiles’

New technology leaves manipulators no place to hide, CSRC chief says

PUBLISHED : Sunday, 26 February, 2017, 11:29pm
UPDATED : Sunday, 26 February, 2017, 11:29pm

The head of China’s securities watchdog refused to name names on Sunday as he vowed pursue “barbarians” and “crocodiles” preying on the nation’s financial markets at the expense of retail investors.

China Securities Regulatory Commission (CSRC) chief Liu Shiyu lashed out at industry ­players manipulating the market.

“I was shocked by the chaos that I saw in financial markets after I came into office,” Liu said.

“These so-called barbarians, demons, evil creatures or financial crocodiles have taken advantage of loopholes in the system and grabbed what they want by cheating or force under the cloak of legality at the expense of small investors.

“We will get even with those ‘financial crocodiles’ who have hurt small investors.”

When asked who were the “crocodiles” he was referring to, Liu said: “How can I continue my work if I tell you who they are?”

Liu also said he had “no information” about tycoon Xiao Jianhua, the billionaire founder of Tomorrow Group which amassed a fortune through various deals linked to China’s political and business elite.

After the fall: CSRC chief Liu Shiyu faces uphill battle to reform China’s stock markets

Xiao left the luxury Four Seasons Hotel in Hong Kong on the eve of Lunar New Year and was helping in investigations linked to the 2015 stock market rout, sources have told the South China Morning Post .

China’s stock market went on a roller-coaster ride in 2015 when prices surged and then plunged, wiping trillions of US dollars off the value equities.

In the fallout, the authorities vowed to crack down on irregularities, and launched investigations into the activities of senior officials and industry players.

Last month, former leading fund manager Xu Xiang was fined 11 billion yuan (HK$12.4 billion) and jailed for 5½ years by a court in Qingdao, Shandong province.

And on Friday the CSRC said Xian Yan, a senior executive of Shenzhen-listed Guangxi Future Technology, was fined 3.47 billion yuan in relation to stock price ­manipulation and failure to ­disclose information.

Tycoon Xiao Jianhua’s return to mainland a political power play, analysts say

Liu said there was no place to hide now that advances in cloud-based computing and big data meant financial transactions left digital trails.

“For all these records, no matter old or new, we will cling to every clue we find. The old tricks don’t work any more,” he said.

CSRC deputy chief Li Chao said the 2015 stock market rout was a “hard lesson” and reminded regulators of the need to keep a tighter rein on the activities of ­brokers and investors.

“We stepped up law enforcement last year to punish illegal acts,” Li said.

“On top of administrative punishment, the CSRC took more than 200 administrative supervisory actions, involving dozens of securities and fund agencies as well as their senior management personnel.”