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Wednesday, September 30, 2015, 17:22

China investors fined for violating 'no sell' order

By Agencies

BEIJING — China's securities regulator says it has fined the first violators of a ban imposed in July on stock sales by major shareholders to stem a slide in prices.

The China Securities Regulatory Commission said four investors, five institutions and eight executives were fined a total of 28.4 million yuan (US$4.5 million). It gave no details of their identities.

The announcement, dated Tuesday, said they were the "first batch" of penalties under the July 8 rule, suggesting more might be announced.

The ban on sales by shareholders who own more than 5 percent of a company was one of a flurry of measures imposed after China's main market index fell 30 percent beginning in early June.

The violators' sales "seriously undermined the market order and damaged investor confidence," the securities commission said in a statement.

Other emergency measures included multibillion-dollar stock purchases by a state-owned brokerages and a finance company.

Authorities have reduced the scale of those purchases but have set no date for easing the ban on sales by big shareholders.

In a separate case, investigators announced Sept 15 the general manager and other executives of China's biggest stock brokerage, state-owned Citic Securities Ltd., were under investigation on suspicion of insider trading and leaking sensitive information.

On Sept 16, the Communist Party of China's Central Commission for Discipline Inspection (CCDI) said the deputy chairman of the securities commission was suspected of "serious violations of discipline".

Chinese shares closed higher on Wednesday, with the benchmark Shanghai Composite Index up 0.48 percent to end at 3,052.78 points.

The Shenzhen Component Index gained 0.39 percent to close at 9,988.25 points. The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, lost 0.76 percent to close at 2,082.67 points.

Total turnover on the two bourses fell to a 10-month low of 371.2 billion yuan (US$58.35 billion) from 420.9 billion yuan the previous trading day.

Military and aviation companies were among the biggest winners, with China Avionics Systems and Avic Aircraft rising by the daily limit of 10 percent. In the afternoon session, three companies under the Aviation Industry Corp. of China (AVIC) unexpectedly suspended trading, fueling merger speculation.

Wednesday marked the last trading day on the two major exchanges before the seven-day National Day holiday, starting on Oct 1. The markets will reopen on Oct 8.

In the third quarter, the Shanghai Composite Index and the Shenzhen Component Index lost nearly 30 percent each partly due to lackluster economic data and the regulator's efforts to leverage the A-share market.

The ChiNext Index, which tracks China's NASDAQ-style board of growth enterprises, lost 0.76 percent to close at 2,082.67 points on Wednesday.

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