As China’s markets make a tentative recovery following a week of hemorrhaging, police and regulators are looking for someone to string up.
Two top CITIC Securities officials, Xu Gang and Ge Xiaobo, were in the newest batch of suspects to be dragged in for questioning by Chinese authorities. The hapless duo were among eight employees of the brokerage being questioned by cops.
Two officials from the China Securities Regulatory Commission (CSRC) and a journo from business mag Caixin also had their collar felt for allegedly “spreading false information”, the South China Morning Post reported. Other organizations that are feeling heat after getting notice from regulators are Haitong Securities, GF Securities, Huatai Securities and Founder Securities.
The situation is particularly awkward for Citic which found itself in hot water earlier in the month after being connected to a joint venture with US hedgie Citadel whose accounts have been banned from the country’s two main stock exchanges for three months.
The official line is that the most recent investigation is part of Xi Jinping’s crackdown on short-selling that has wreaked havoc on the A-share market since June. How effective this crackdown will be in curbing such practices is highly questionable when most of people responsible are likely beyond China’s grasp.
In reality this all about the last two weeks. This symbolic corruption purge is really about the Chinese leadership being seen to be in control of a situation that for the past fortnight has clearly been out of their hands.
Photo: Der Vollstrecker