Market regulator among 8 detained in China over alleged trading malpractice after police spent weeks 'quietly' on their trail
Investigators had been quietly building up to a surprise statement this week into alleged irregularities in China's financial sector
The investigation "started quietly weeks ago" but its high-profile, late-night announcement took many by surprise, with some seeing it as a drastic response by Beijing to the "Black Monday" market rout that sent mainland shares to eight-month lows.
Xinhua announced on Tuesday night that eight people - including a top executive of a major mainland securities firm, an employee of a well-known media group as well as a serving and a former official of the national market regulator - had been taken away for questioning over alleged market malpractice.
Sources familiar with the case told the South China Morning Post on Wednesday that police had been making informal inquiries "for weeks" and the case was not directly linked to the market turbulence. But they said it did reflect the leadership's determination to weed out rampant irregularities in the financial market.
"The investigation is not only about the current market correction. It was triggered by something bigger. It is more complicated than people think," a former senior official with the China Securities Regulatory Commission (CSRC) told the Post.
The assessment came as Xinhua issued a commentary calling for greater efforts to "purify" the capital markets. It said more people would be implicated as the investigation went deeper.
The Xinhua commentary, posted on the central government's website, vowed the police would "get to the bottom of things" and punish those caught in breach of market regulations.
