Chinese police detain three senior bankers in bond market probe: Caixin

[SHANGHAI] Chinese police are investigating three banking veterans in the bond market for illegal dealings, financial magazine Caixin reported on its website on Tuesday, as regulators toughen their stance on bad behaviour in financial markets.

Authorities in the eastern Chinese city of Xuzhou took away the three senior bankers on suspicion of making illegal profits via trades of medium-term notes and short-term bills, Caixin reported, citing unidentified sources.

The three bankers included a vice general manager at Industrial and Commercial Bank of China (ICBC), the head of asset management at Hengfeng Bank and the head of a subsidiary of BOSC Asset Capital Management, Caixin said.

Reuters could not immediately reach Hengfeng Bank for comment and ICBC declined to give immediate comment.

BOSC Asset Capital Management said the executive, named as Feng Jian, had not been seen in the office recently, but declined to comment further.

Reuters could not immediately reach Feng for comment.

If confirmed, the investigation would be the latest in a string of scandals and investigations in Chinese financial markets over the past several years spanning stocks and fixed income.

The regulatory environment for finance has become much stricter, many market insiders say, since a stock crash in 2015 which was partly blamed on illegal practices at brokerages.

Although most high-profile investigations have centered around equities and bank bills, there have also been cases related to bonds.

In April 2013, state media reported that three Chinese financial industry executives had been arrested for allegedly using complex bond trading practices to skim clients' profits for personal gain.

REUTERS