Three former chief executives of a defunct Chinese securities house were arrested last week on charges of manipulating stock prices, sources confirmed yesterday.
Kan Zhidong, Liu Bo and Guo Yuanxian were all former chief executives or chairmen, or both, of Shenzhen-based Southern Securities, the largest brokerage to be shut by the market regulator so far.
Kan was arrested in Shanghai on March 2 and taken back to Shenzhen, where the other two former executives had already been detained.
Family members were unable to contact the three men after their arrests, according to a report in the magazine Caijing.
'According to China's criminal and newly published securities law, the most serious penalty they are facing is five years in jail and a fine of between one and five times the amount involved in the case,' said Huang Danhan, a securities lawyer and former head of the legal division at Galaxy Securities.
The arrests were the first criminal proceedings brought against top management at the distressed broker, which was shut in 2004 as part of an industry clean-up by the China Securities Regulatory Commission (CSRC). The case allegedly involved more than 20 billion yuan of mismanaged funds.