Update | Chief of Galaxy Securities unit questioned in illegal bond probe
Head of fixed-income business and two of his employees are the latest to fall foul of financial regulator's probe into illegal bond trading
Beijing's crackdown on illegal bond trading has deepened, with a probe by law-enforcement authorities centred on the chief of Galaxy Securities' fixed-income division adding to the unsavoury reputation of the mainland's debt market.
Dai Xu, the top manager of Galaxy's fixed-income businesses, and two employees in his department, had been required to assist authorities investigating their "personal matters", Galaxy, one of the mainland's largest brokerages, said in a statement on the weekend.
The investigation of Dai and his colleagues follows a series of scandals in the bond market involving more than 10 people, including a department director with the mainland's top economic planning agency.
"The government appears to be fully aware of the deep-rooted problems in the fast-growing bond market," said Gu Weiyong, chief investment manager of Shanghai Ucon Investment Management. "An intensified crackdown is needed to ensure long-term healthy growth."
A Beijing-based source close to the state financial regulators said that dozens of unscrupulous officials and asset managers would be exposed soon because state leaders were determined to clean up the bond market.
Beijing began probing suspicious bond trading in the interbank market early last year.
Wang Qishan, the head of the Communist Party's anti-graft body, reportedly directed the investigations.