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China police find clues of illegal stock trading

Xinhua | Updated: 2015-07-12 14:03

China police find clues of illegal stock trading

Chinese investor smiles as he looks at prices of shares (red for price rising) at a stock brokerage housein Nanjing city, East China's Jiangsu province, July 10, 2015. [Photo/IC]

BEIJING - An investigation team led by China's Vice Minister of Public Security Meng Qingfeng has found clues that certain trading firms have suspectedly manipulated futures trading in the stock market.

The team is currently carrying out further probes. It did not give other details.

The investigation team visited the head office of the China Securities Regulatory Commission on Thursday morning to investigate what it called "malicious short-selling of stocks and stock indices", an example of the dodgy practices many believe were part of the recent stock over the past few weeks.

The team arrived in Shanghai on Friday to search for further clues on such illegal practices.

After China's key stock index plunged by over 30 percent from its June 12 peak, the government has stepped in with various measures to save the market, including pouring in funds and restricting futures trading on a major small-cap index.

On the back of the supportive measures, the stock market staged a strong rebound for a second consecutive day on Friday, with the benchmark Shanghai Composite Index surging 4.54 percent to end at 3,877.8 points.

Related: Illegal trading investigated after stock market chaos

BEIJING - The Ministry of Public Security has joined hands with China's financial regulators to stabilize the stock market, vowing to crack down on illegal futures trading.

A team led by Vice Minister of Public Security Meng Qingfeng visited the head office of the China Securities Regulatory Commission (CSRC) on Thursday morning to investigate what it called "malicious short-selling of stocks and stock indices", an example of the dodgy practices many believe resulted in the rout in the Chinese stock market over the past few weeks.

Police and the stock regulator have also looked into more than 10 institutional and individual investors for alleged "malicious" shorting of blue-chip stocks, the China Securities Journal reported on Thursday.

Most of the country's stock index futures traded down by the daily limit of 10 percent earlier this week as the Shanghai and Shenzhen benchmark indices tumbled nearly 30 percent from their peaks in mid-June.

However, with additional funding provided by Chinese securities brokerages and regulators, the stock market ended its losing streak on Thursday. The bounce continued through Friday, as the Shanghai Composite Index closed up 4.54 percent while the benchmark in Shenzhen surged 4.59 percent. Around 1,400 listed firms, over half of all those traded in Shanghai and Shenzhen, are suspended from trading to prevent a further retreat in share prices, according to market intelligence agency Wind.

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