Shanghai: China’s top stock market regulator said today nearly 20 companies would be fined for “illegal market activities,” as it struggles to restore confidence after a months long share price rout. The China Securities Regulatory Commission (CSRC) will fine 18 companies and more than a dozen individuals around 1.1 billion yuan (USD 173 million) for violations including “market manipulation,” it said. China is struggling to restore confidence in its stock markets, intervening on a broad scale amid months of declines which began in June and roiled exchanges worldwide.
It earlier banned shareholders holding at least five per cent stakes and company executives from selling stock, as part of its “rescue package” aimed at boosting the market. The agency said it will also confiscate around 329 million yuan from the companies and 13 individuals involved.
Analysts have criticised China’s intervention — costing tens of billions — in its stock markets, with the chief of Goldman Sachs this week calling it “ham-handed,” and “sloppy.” “They don’t have a lot of experience in this market stuff,” Lloyd Blankfein said, referring to the ruling Communist authorities.
China’s stock market is thought to have little connection with economic fundamentals, but the rout has added to fears about the country’s growth. The Federal Reserve held its key interest rate locked at zero yesterday, citing worries about how China’s slowdown will hit the US economy. China’s ruling Communist party said this week it was robing an assistant chairman of the CSRC for possible corruption.
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