The securities market watchdog has imposed hefty fines on a domestic brokerage in an expected last crack of the whip in 'the year of supervision'. Zhejiang Securities drew a combined 503.12 million yuan (about HK$471.52 million) in fines - described by a spokesman as the highest amount meted out by the China Securities Regulatory Commission (CSRC) 'in recent years' - for flaunting various market rules. The CSRC has also revoked the brokerage's proprietary trading licence. Several top company officials face fines, public censure and possible criminal prosecutions, mainland newspapers said. Zhejiang was disciplined for offences including misappropriating funds from clients' margin accounts and irregularities in proprietary trading, a CSRC spokesman said. With a formal document pending, CSRC officials declined to comment on the disciplinary actions. But reports in various newspapers said the brokerage drew the bulk of the fines, or 460.79 million yuan, for helping clients of its broking arm to raise the same amount for stock investment. Mainland-listed companies frequently set up trust management accounts with brokerages for stock investment and use the earnings to complement operational revenue. Before the mainland securities law banned account overdrafts, brokerages often helped corporate clients raise funds from banks and other sources to finance their stock investment, said Gui Haoming, assistant president of Shenyin Wanguo Securities Research Institute in Shanghai. Zhejiang, which reportedly committed the acts between January and October last year, was apparently accused of violating the law in effect since June 1999. Mainland officials have been cracking down on illegal bank funds in the stock markets for fear they would aggravate the fragility of the banking system. They were also concerned the influx would increase stock market volatility, Mr Gui said. Zhejiang had also misappropriated 630 million yuan of funds from clients' margin accounts for stock speculation up to March. Since December 1998, the brokerage used 56 stock accounts, including 53 retail accounts, two proprietary trading accounts and an institutional investor account to buy bulk shares in Shanghai-listed pesticide maker Qianjiang Biology. It then used different shareholders' accounts to trade the shares with itself in an attempt to sway share prices and trading volume. The CSRC has ordered the confiscation of Zhejiang's profit of 42.33 million yuan from manipulation of the stock and also imposed a punitive fine of an equal amount. The CSRC saw the problem as prevalent enough to justify new rules in October decreeing brokerages separate clients' margin accounts from their own proprietary trading accounts.