Chinese police find signs of illegal share trading
Public security task force heads to Shanghai in search of 'malicious short-sellers' as weary investors brace for another week of volatility
Mainland police have found "clues" of suspected manipulated trading in securities and index futures, which Beijing sees as one of the main drivers of the stock market rout over the last month, state media reported on Sunday.
The stepped-up investigation into market irregularities is the latest central government effort to end the market's roller-coaster ride but the outlook for this week remains uncertain amid a flood of trading resumptions.
The Ministry of Public Security sent a task force led by vice-minister Meng Qingfeng to the China Securities Regulatory Commission on Thursday morning, launching an all-out investigation into "malicious short-selling" after the key indicator nosedived more than 32 per cent in less than a month, a sharp fall likely to wreak havoc on the financial system and threatening to ignite social unrest.
Xinhua reported on Sunday that the task force arrived in Shanghai on Friday, suggesting that some of the trading firms suspected of manipulation would be named soon.
It said the team was still investigating and had clues that certain firms might have manipulated futures trades, without giving further details.
The benchmark Shanghai Composite Index rebounded 10.6 per cent late last week, but lingering worries of a sell-off this week continued to weigh on the stock market.
As of Friday, trading in about 1,400 firms - nearly half of the total traded on the Shanghai and Shenzhen exchanges - was suspended amid a bloodletting. By last night, about 260 had announced they would resume trading today, a move that would likely ratchet up liquidity pressure on the market.