China charges three for stock futures ‘manipulation’

Investors monitor stock price movements at a securities company in Beijing. PHOTO: AFP

Investors monitor stock price movements at a securities company in Beijing. PHOTO: AFP

SHANGHAI: China has formally charged three people for manipulating the stock futures market, a government statement said Thursday, as authorities seek to limit volatility following a share collapse last year.

Two executives from an import-export company and an employee at a futures firm used 31 accounts under other names to buy and sell stock index futures using high-frequency trading software, state media have previously reported.

Shanghai’s benchmark index plunged more than 40 percent from its peak in mid-June of 2015, as a bubble burst after the government loosened limits on trading with borrowed money and encouraged buying with glowing commentary in state-controlled media.

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Authorities have since blamed volatility in stock futures as one of the factors behind the falls, and began restricting such trading as part of moves to rescue the market.

Shanghai prosecutors said in a statement they had charged the general manager of trading firm Yishidun, Gao Yan, and its business development manager Liang Zezhong, as well as Jin Wenxian, the technical director of China Fortune Futures.

The three were arrested last November.

Yishidun reaped gains of more than 2 billion yuan ($300 million), having started with just 3.6 million yuan in funds, the official Xinhua news agency said previously.

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Based in Jiangsu province near Shanghai, Yishidun was set up by two foreign nationals previously named by Xinhua as Georgy Zarya and Anton Murashov. The pair, believed to be Russian, have fled mainland China, business magazine Caixin reported Thursday.

The China Financial Futures Exchange on Thursday denied it is considering relaxing some of the futures limits imposed last year.

Bloomberg News on Wednesday quoted “people familiar with the matter” as saying the exchange was considering lower margin requirements and smaller fees on same-day transactions.

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