| Former brokerage chief arrested for insider trading |
SHANGHAI, Aug. 10 -- THE former president of a Chinese mainland broker has been arrested on suspicion of insider trading amid the firm's proposed back-door listing as authorities revved up bids to combat securities crimes.
Dong Zhengqing, former president of GF Securities Co, has been detained by police for allegedly conducting insider trading and leaking insider information, Xinhua news agency said late yesterday.
In May, police started a probe into Dong and other officials after receiving evidence from the China Securities Regulatory Commission. Dong and the other officials were arrested on July 19, the report said, citing the Ministry of Public Security.
The investigation is still under way, according to the report, which didn't disclose the identities of the other people that were arrested. A spokesman at GF Securities declined to comment further today.
Dong in early June quit as the president at GF Securities because regulators discovered irregularities during the broker's backdoor issuance, "which has cast a negative influence on the broker,'' according to an earlier statement.
GF Securities, China's fourth biggest broker by 2006 revenue, in September proposed to acquire Yan Bian Highway Construction Co via a stock swap for the purpose of a back-door listing.
The deal has yet to gain regulatory approval. The stock watchdog said in May that it would punish a raft of companies and executives involved in the planned listing after it found improper disclosures and insider trading in the process.
Earlier media reports said Dong's brother made a profit of nearly 100 million yuan (US$13.2 million) by trading Yan Bian's shares through insider information.
GF Securities said in a June statement that the resignation of its president wouldn't hinder the broker's back-door issuance. Haitong Securities Co, which proposed a similar listing in October, won the regulatory nod to trade in Shanghai early this month.
Financial regulators have been taking a tougher stance against insider trading and stock-price manipulation by punishing a string of analysts, fund managers and executives at listed firms this year.
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