Pun­ished over do­mes­tic trades and for ma­nip­u­lat­ing stocks through Shang­hai-HK link

New Straits Times - - Business | World -

CHI­NESE reg­u­la­tors seem to have run out of pa­tience with Tang Hanbo.

The China Se­cu­ri­ties Reg­u­la­tory Com­mis­sion (CSRC) on Fri­day or­dered Tang to pay a to­tal of 1.17 bil­lion yuan (RM753 mil­lion) in two cases of stock mar­ket ma­nip­u­la­tion, one of which was the first to in­volve trad­ing through the stock con­nect be­tween the main­land and Hong Kong.

Tang, 43, has been pun­ished for il­le­gal trad­ing at least twice be­fore. But it ap­pears his pre­vi­ous penalties from the CSRC, which in­clude 39 mil­lion yuan in 2014 and 15 mil­lion yuan in 2015, weren’t enough to de­ter his bad be­hav­iour.

On Fri­day, Tang, a Chi­nese na­tional based in the city of Shen­zhen, was or­dered to pay 251 mil­lion yuan for al­legedly us­ing the link be­tween the Shang­hai and Hong Kong ex­changes to ma­nip­u­late a Shang­hai-listed stock, Zhe­jiang China Com­modi­ties City Group Co. He was also hit with 925 mil­lion yuan in fines and dis­gorge­ment over do­mes­tic trades car­ried out from De­cem­ber 2014 to April 2015.

“It seems to be the record fine im­posed by CSRC on in­di­vid­u­als by amount so far,” said Eric Liu, a part­ner at Zhao Sheng Law Firm in Shang­hai.

The penalties im­posed on Tang are smaller than the 3.47 bil­lion yuan the CSRC plans to im­pose on Xian Yan, a for­mer con­troller at Guangxi Fu­ture Tech­nol­ogy Co. The reg­u­la­tor would pe­nalise Xian for sus­pected vi­o­la­tions on in­for­ma­tion dis­clo­sure and stock ma­nip­u­la­tion, spokesman Zhang Xiao­jun said at a brief­ing on Fe­bru­ary 24. The penalties haven’t been of­fi­cially an­nounced by the CSRC.

In the Hong Kong-re­lated penalties, Tang was fined 209 mil­lion yuan over trad­ing in Zhe­jiang China and told to give up il­licit gains of 42 mil­lion yuan.

Fel­low trader Wang Tao, who couldn’t be reached for com­ment, was given a 600,000 yuan fine over the trans­ac­tions.

Both traders have the right to ap­peal.

In the other case against Tang, the CSRC claimed that he and four of his rel­a­tives ma­nip­u­lated main­land stocks us­ing seven do­mes­tic ac­counts.

The reg­u­la­tor is­sued a penalty against the five ac­cused in­di­vid­u­als to­talling 990 mil­lion yuan.

In De­cem­ber, Tang filed a ju­di­cial re­view in the Hong Kong High Court to rule that the Se­cu­ri­ties and Fu­tures Com­mis­sion’s (SFC) seizure of trad­ing data from his home was un­law­ful. The SFC had share the in­for­ma­tion seized with main­land of­fi­cials.

The CSRC said in the stock con­nect case Tang and Wang al­legedly en­gaged in prac­tices that in­cluded spoof­ing, ma­nip­u­lat­ing open­ing and clos­ing prices, and self-trad­ing.

From Fe­bru­ary 4 to April 26, 2016, their trad­ing ac­counted for more than 10 per cent of the stock’s daily vol­ume.

In 10 days dur­ing that pe­riod, their ac­tiv­ity was more than 20 per cent of the mar­ket in the shares.

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