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China's CITIC Sec denies media allegations of insider trading
[SHANGHAI] China's biggest brokerage CITIC Securities has denied engaging in insider trading after media reports asked why its biggest shareholder CITIC Limited had sold shares in the broker before a regulatory ban last week.
In a statement late on Monday which it said was issued in response to unspecified media reports, CITIC Securities said that CITIC Limited was "acting in the normal course of business"when it sold shares in the broker and had only heard about the regulatory action at the same time as the public.
On Friday, the China Securities Regulatory Commission barred CITIC Securities, Haitong Securities Co Ltd and Guotai Junan Securities, from opening new accounts for three months amidst an investigation into their adherence to margin trading rules.
The ban caused shares in CITIC Securities to fall by the maximum 10 per cent limit in Shanghai on Monday.
CITIC Limited did not respond to repeated calls seeking comment. Over the weekend, local media said CITIC Limited had sold shares in CITIC Securities from Jan 13 to Jan 16 because it may have known that the securities regulator was about to ban the broker from opening new margin trading accounts.
CITIC Securities has said it had violated rules in its margin trading business and pledged to correct its mistakes.