BEIJING, Sept.6 (Xinhua) -- China's securities
watchdog has demanded a crackdown on insider trading and price rigging following
a stock had kept rising to the daily limit for consecutive 42 days driven by its
false announcement of money injection.
*ST Jintai, a Shandong-based pharmaceutical firm that
had been in the red for three years (hence the star prefix before its
stockname), had kept rising to the daily limit of five percent since July 9,
when it announced it would sell up to eight billion A shares to 10 investors.
Its share price has since soared by more than six
times within two months, from 3.96 yuan on July 9 to 26.58 yuan on Aug. 31, when
rumor had it that one of its source of capital injection, the World Trade Plaza
(Shenyang) was illegal and had been ordered by the local government to shut
down.
The stock plummeted to the daily five-percent limit
on the following trading days. Its price continues to slide five percent to
close at 19.59 yuan on Thursday.
The "abnormal fluctuation" of *ST Jintai has come
under scrutiny and an official from Shandong securities watchdog was quoted by
the China Business News on Thursday as saying that they are keeping a close
watch on the stock.
Insider trading is becoming more difficult to detect
and price rigging more diversified, posing a "huge challenge" to law enforcement
on securities, according to Fan Fuchun, vice chairman of the China Securities
Regulatory Commission (CSRC).
"With more frequent M&As and assets
restructuring, insider information will accordingly increase," he said, adding
that the rising number of insider trading cases has seriously disturbed
securities market and harmed interests of investors.
The CSRC has adopted more specific standard to
determine insider trading and price rigging and has achieved "positive" effects
after a trial run for a time, he said.
Shang Fulin, head of CSRC, Tuesday called upon his
staff to exert themselves on regulating the country's capital market based on
the speech by the Chinese President Hu Jintao on financial reform.
In his speech, Hu urged related departments to
develop a steadyand healthy financial sector by enhancing its comprehensive
competitiveness and risk control management.
The CSRC has also announced the conclusion of a
three-year comprehensive overhaul of the country's securities dealers to reduce
operation risks, closing 19 companies and suspending business licenses of
several others. According to the commission,104 securities companies in
operation nationwide were up to standard.
Vice President Xi Xiaoming of the Supreme People's
Court of China was quoted by Caijing Magazine on Monday as saying that law
makers were deliberating upon the revision of the Securities Law, requiring
those who engage in insider trading and price rigging tobear civil
responsibility, such as returning properties or paying a penal sum.
Although related judicial interpretation is still
being drawn up, courts at various levels can still receive such cases.
China's stock market rose to a new high on Thursday,
with the benchmark Shanghai Composite Index up 1.56 percent to 5,393.66 points,
and the smaller Shenzhen Component Index rose 0.40 percentto end the day at
18,073.76 points.
