China’s securities regulator has hit Xiamen-based Bei Ba Dao Group (北八道集团) with a record fine of over 5.6 billion yuan (approx. USD$890 million) for share manipulation.
The China Securities Regulatory Commission convened a press conference on 14 March to announce that Bei Ba Dao had engaged in the manipulation of shares in Jiangsu Zhangjiagang Rural Commercial, Guangdong Hoshion Alumini and Jiangyin Jiangyin Rural Commercial Bank to raise several billion yuan in funds.
CSRC said that it had hit Bei Ba Dao with a fine of 5.67 billion yuan – the largest penalty ever dispensed by the regulator in its history, and well ahead of the previous record-holding fine of USD$510 million that was meted out to investor Xian Yan for market manipulation in February last year.
According to CSRC Bei Ba Dao used over 300 share accounts, over 100 computers and over 10 traders to engage in simultaneous trades and manipulate share prices.
Bei Ba Dao senior executives also refuse to cooperate with investigations, while accounts staff reportedly attacked investigators and destroyed evidence.
National Business Daily reports that Bei Ba Dao engaged in the manipulation of three stocks towards the start of last year, leading to highly irregular price movements.
Guangdong Hoshion saw its share price surge 95.53% during the period from 6 to 15 February 2017, while Jiangsu Zhangjiagang Rural Commercial saw a price rise of 135.19% from 6 to 21 February 2017, and Jiangyin Jiangyin Rural Commercial Banksaw an increase of 114.2% from 10 to 28 February 2017.
During the same month China’s SME board saw an increase of only 4.48%.
According to National Business Daily CSRC’s investigations revealed that a number of securities firms operating out of the Fujian-province city of Xiamen are involved in stock manipulation.