Officials jailed for insider trading
Updated: 2011-12-28 08:11
By An Baijie (China Daily)
BEIJING - The country's graft-busting authorities have vowed to keep a close eye on officials to punish insider trading, a news conference heard on Tuesday.
"The Ministry of Supervision is closely watching the new trend that some Party officials have been involved in insider trading," Yao Zengke, vice-minister of supervision, told China Daily.
High-profile cases mentioned by Yao include that of Xiao Shiqing, former Party secretary and president of China Galaxy Securities, who was sentenced to death with two years' reprieve in March for insider trading as well as taking bribes.
Xiao was found to have made a profit of 104 million yuan ($16.4 million) in 2006 by tipping his relatives to purchase the stocks of a company that was going through a reconstruction and merger process, according to Yao.
In another case, Li Qihong, former mayor of Zhongshan in Guangdong province, pocketed 198 million yuan by purchasing stocks through his relatives in June 2007 when he was in charge of reconstruction work of a local State-owned enterprise.
Li was sentenced to 11 years in jail in October for insider trading and bribe taking, fined 20 million yuan and had 100,000 yuan confiscated.
These Party officials usually took part in insider trading through such means as opening accounts in the names of their relatives, colleagues, friends and even their babysitters. Some even bought ID information from strangers to open accounts, Yao said.
Liu Jinguo, vice-minister of public security, said at the news conference that the ministry has seized more than 2.2 billion yuan in illegal profits in 50 serious insider trading cases since 2004, catching more than 90 suspects.
Apart from company managers, more government officials have been found to be the culprits.
And it is usually more difficult for investigators to find evidence of the hidden measures, Liu said.
The China Securities Regulatory Commission will continue to monitor abnormal exchanges in the securities market to prevent insider trading, Gui Minjie, vice-chairman of the commission, said at the news conference.
The State Council issued a notice to require the relevant government agencies to crack down on insider trading in the securities market in November last year.
Dong Dengxin, director of the Finance and Securities Institute at Wuhan University of Science and Technology, said that the authorities' determination to fight insider trading is expected to "bring moderate confidence to the depressed stock market".
"Government officials must receive harsh punishment for insider trading, and only by doing this will the stock market be regulated in an orderly fashion," Dong said.