Beijing investigates senior figure at China’s state securities regulator in latest step to crackdown on market irregularities
The assistant chairman of China Securities Regulatory Commission Zhang Yujun is being investigated for ‘disciplinary violations’
The mainland’s anti-graft watchdog is investigating a senior figure at the state securities regulator, as Beijing takes its latest step in cracking down on market irregularities.
Zhang Yujun, an assistant chairman overseeing brokerages and fund houses at the China Securities Regulatory Commission, was suspected of “serious disciplinary violations”, the Central Commission for Discipline Inspection said on Wednesday. The term is usually a euphemism for corruption.
The investigation into Zhang follows probes into a clutch of senior officials at Citic Securities, including president Cheng Boming as Beijing shows its determination to clean up the arcane stock market. The crackdown follows a recent stock rout and a failed government intervention to stabilise the market with rescue funds of at least 1 trillion yuan (HK$1.21.trillion).
Zhang, born in 1963, holds doctorates in economics and law and is touted by industry insiders as a capable and knowledgeable technocrat.
He was president of the Shenzhen Stock Exchange from 2000 to 2008 before becoming president of the Shanghai bourse where he remained until 2012. In August 2012, he was appointed assistant chairman at the CSRC.
“He is widely respected in the securities industry for his reformist outlook,” said a Shanghai-based fund manager. “But he didn’t seem to sit well with other senior CSRC officials.”
A stock market rout between mid-June and early July that triggered fears of a financial crisis in China prompted Beijing to step in to restore investor confidence.
It was estimated that more than 1 trillion yuan in rescue funds was pumped into the plummeting market to stop its downward spiral.
Mainland police began investigating “malicious short-selling” in early July in an apparent effort to underpin the falling stocks.
However, the rescue efforts were largely unsuccessful and by mid-August key indicators had succumbed to a renewed slump.
Late last month, senior officials with at the mainland’s largest brokerage, Citic Securities – including managing director Xu Gang – were taken away by police investigating illegal securities trades.
During his time at the CSRC, as assistant chairman, Zhang directed securities firms to expand their business scope, encouraging them to do more margin trading and asset management business to boost profits.
