Update | China's CITIC Securities credit profile threatened by police investigation

The credit profile of CITIC Securities, China’s biggest brokerage, could be significantly undermined by the police investigation for suspected insider trading and the company’s elevated exposure to the country’s volatile equity markets, Standard & Poor’s Rating Services said on Thursday.

"Although there are no visible signs that the probe has affected CITICS’ business flow, we believe the widened police probe may pose significant challenges for CITICS’ business operations over the longer run," said Standard & Poor’s credit analyst Harry Hu.

"The impact could be acute if CITICS is found to be partially responsible for any wrongdoings by its senior managers, and therefore subject to regulatory sanctions." 

For more on the investigation of CITIC and the officials take away by police, please click here. 

Standard & Poor’s has placed its ’BBB+/A-2’ and ’cnA+/cnA-1’ Greater China regional scale ratings on CITIC Securities Co. Ltd. (CITICS) and CITIC Securities International Co. Ltd. (CSI) on credit watch with negative implications. The rating company also placed all issue ratings on the debt of CITICS on credit watch with negative implications, except the ’A’ long-term and ’cnAA+’ Greater China scale ratings on the US$800 million bonds that Bank of China Ltd. guarantees.

China’s official Xinhua News Agency reported on Tuesday that three top executives, including the company president of CITIC Securities, were taken by police for investigation, suspected of inside trading and leaking inside information during the recent stock market rout of mainland shares. Media reports several other senior managers were taken for investigation.