A Guangfa Securities spokesman has categorically denied media
reports that about a dozen of its staff members were detained by
the local public security bureau in Guangdong for interrogation in
an insider trading investigation.
The spokesman told China Daily that none of its staff
members had ever been asked to assist the year-long probe into the
insider trading case.
The Guangdong public security bureau declined comment at this
stage.
The China Securities Regulatory Commission (CSRC) has sent
penalty notices to Shenzhen-listed Yan Bian Highway Construction Co
Ltd and Jilin Aodong Medicine Industry Group Co Ltd for failing to
disclose timely and accurate information about their ties to
Guangfa Securities.
The securities watchdog cited evidence of insider trading and
other forms of financial crimes following a year-long investigation
into Guangfa's attempt to seek a backdoor listing by buying into
Yan Bian.
On June 1, Guangfa CEO Gao Zhengqing stepped down from his post
and admitted his brother owned Yan Bian shares, but he denied that
he ever leaked any insider information to his brother.
Shares of Yan Bian and its biggest shareholder, Jilin Aodong,
inexplicably rose from March 2006 for two months, after which Yan
Bian announced that Guangfa was seeking to be listed by buying into
Yan Bian.
(China Daily June 13, 2007)