Corruption in China

China charges former No 2 securities regulator for taking US$10.5 million in bribes and insider trading

Former CSRC vice-chairman Yao Gang is the most senior official investigated after the 2015 stock turmoil that wiped off US$5t in market value

PUBLISHED : Wednesday, 11 July, 2018, 6:28pm
UPDATED : Wednesday, 11 July, 2018, 10:53pm

China has put Yao Gang, former vice-chairman of the China Securities Regulatory Commission (CSRC) on trial in a local court on Wednesday for taking 69.6 million yuan (US$10.5 million) in bribes and illegally making 2.1 million yuan of gains from insider trading, the Central China Television reported.

Yao, 56, was placed under investigation for alleged corruption in November 2015, five months after the worst rout in China’s stock market history that wiped out US$5 trillion of market value in weeks and shook global financial markets.

Prosecutors in northern Hebei province on Wednesday filed charges against Yao for offering favours to ease share trading suspension or resumption for several companies as they underwent mergers and acquisitions as well as restructuring while he was assistant chairman and then vice-chairman of the CSRC between 2006 to 2015. He was paid in return, through his family, a total of 69.6 million yuan.

The prosecutors also claimed that Yao had used insider information to trade stocks through accounts under the names of other people, earning 2.1 million yuan illegally between January and April in 2007.

Yao accepted the criminal charges and expressed regret, CCTV reported. Sentencing will be announced on another unspecified day.

Yao was the most senior official investigated by the authorities after a debt-fuelled stock market bubble pushed the benchmark to soar 150 per cent in a few months from late 2014, only to result in a subsequent crash in the summer of 2015.

Former CSRC head Xiao Gang, who was in charge of saving the market during the turmoil, was dismissed in February 2016 for being unable to arrest the volatile plunge of the A-share market.