China CITIC Securities Chairman Arrested ?

Shares Of Major Chinese Brokerage Plunge, Company Denies Rumors That Its Chairman Was Taken In By Police

It was a rough night for the Chinese market. The Shanghai Composite fell about 1.5%.

A big loser: Citi Securities, a major brokerage. It fell over 9%.



Bloomberg

There is a rumor that the company had to deny that its chairman was taken in by the cops.

Caijing has the story:

Rumor has it that the company lost as much as 2.9 billion yuan from overseas investment, and that its chairman Wang Dongming was taken away for investigations, leading to a cross-border decline in brokerage business

China's leading brokerage CITIC Securities (CITICS) denied a rumor that its chairman Wang Dongming was taken away by police for investigations and it failed to disclose huge losses overseas on Monday, when its shares slumped nearly to the daily limit of 10 percent.

"The rumors are all unfounded," said company secretary Zheng Jing, "We are also seeking for reasons for the nosedive; however, the company recently has nothing that should be disclosed but it didn't."

CITICS Denies Rumors of Probe Against Chairman; Shares Plummeting

Rumor has it that the company lost as much as 2.9 billion yuan from overseas investment, and that its chairman Wang Dongming was taken away for investigations, leading to a cross-border decline in brokerage business

China's leading brokerage CITIC Securities (CITICS) denied a rumor that its chairman Wang Dongming was taken away by police for investigations and it failed to disclose huge losses overseas on Monday, when its shares slumped nearly to the daily limit of 10 percent.

"The rumors are all unfounded," said company secretary Zheng Jing, "We are also seeking for reasons for the nosedive; however, the company recently has nothing that should be disclosed but it didn't."

Rumor has it that the company lost as much as 2.9 billion yuan from overseas investment, and that its chairman Wang Dongming was taken away for investigations, leading to a cross-border decline in brokerage business in afternoon trading.

CITICS fell 9.1 percent to 10.99 yuan; Southwest Securities and Everbright Securities dropped more than 9 percent, while others including Huatai Securities, Haitong Securities, Guoyuan Securities and Soochow Securities all suffered a drop of over 8 percent.

Some in the industry believe CITICS' slump has something about short selling by some investors in the secondary market. Huang Sheng, a professional investor, said in his verified microblog that he shorted CITICS because its purchase of CLSA has brought with potential risks for the company.

19 listed brokerages reported a combined operation income of 3.16 billion yuan and a net profit of 732 million yuan in July, down 35 percent and 60 percent from the previous month, respectively.

The floating of the unlocked 126.2 billion yuan worth of shares in August also weighs on brokerages, weakening the industry's outlook.