China police summon 11 over stock market activities: reports

[SHANGHAI] Chinese police have summoned 11 people including a financial journalist to assist investigations related to illegal stock market activities, state media reported, as the government targets volatility on the exchanges.

The Chinese government launched an unprecedented rescue package as the stock market plummeted 30 per cent from mid-June, which included a crackdown on short-selling and funding a state company to buy shares on its behalf.

Authorities have accused a Caijing magazine journalist of allegedly colluding with others to manufacture and spread false information on securities and futures trading, the official Xinhua news agency reported late Tuesday.

The magazine confirmed journalist Wang Xiaolu was subpoenaed by police but defended his actions.

Wang wrote a story in July saying the securities regulator was studying plans for government funds to exit the market.

The China Securities Regulatory Commission (CSRC) quickly denied the Caijing story and labelled it "irresponsible".

But Caijing said it "defended journalists' rights to do their duty under the law", according to a statement posted on its website Wednesday.

The CSRC said earlier this month that the China Securities Finance Corp. - a state-backed company tasked with buying shares - would continue to have a role for a "number of years", but would only enter the market during times of volatility.

The CSRC comments were widely seen by investors as a signal of less government intervention in the stock market.

Separately, eight people from Citic Securities, the country's top brokerage by assets, are also suspected of illegal trading, including managing director Xu Gang, media reports said. No specific details were given.

A current CSRC employee who worked on public offerings and one former employee involved with market regulation are suspected of insider trading and forging official documents, the reports said.

AFP