China announces confessions in stocks plunge probe

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Chinese state media announced a slew of confessions on Monday following investigations into recent stock market gyrations, including from a detained reporter who admitted to spreading false information that caused "panic and disorder."

An official from China's securities regulator had confessed to insider trading while four senior executives from China's largest brokerage, CITIC Securities, had also confessed to insider dealing, the official Xinhua news agency reported.

China is trying to boost its stock markets, which have plunged some 40 percent since mid-June on concerns over the country's slowing economy and an unexpected devaluation of the yuan currency in mid-August.

Among a number of measures, authorities have cracked down on the fabrication of trading information, alleged malicious short selling and other strategies seen as hampering a recovery.

Xinhua said Wang Xiaolu, a reporter at the respected Caijing business magazine, had confessed to writing about the Chinese stock market "based on hearsay and his own subjective guesses" that "inflicted huge losses on the country and investors."

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Xinhua did not say if Wang wrote more than one story or detail what he reported.

Caijing could not be reached for comment. In a statement last Wednesday, a day after Xinhua said Wang was being held, Caijing said it had not been given a reason for his detention, adding it would support his actions within the normal course of reporting. It was unclear if Wang had a lawyer.

Chinese state media often publish confessions of those detained in high-profile cases before they are tried in court, a practice that rule of law advocates say violates the rights of the accused to due process.

Xinhua also said Liu Shufan, an official with the China Securities Regulatory Commission (CSRC), had confessed to insider trading, forging official seals and using his position to boost a listed company's share price in return for several million yuan worth of bribes. It was unclear if Liu had been detained or had a lawyer.

The CSRC could not be reached for comment.

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Xinhua added that Xu Gang, Liu Wei, Fang Qingli and Chen Rongjie, whom it described as senior executives at CITIC Securities, had confessed to insider trading, although it gave few details.

A CITIC Securities spokesman declined to comment. On Sunday, the brokerage said several senior managers had been asked to assist with a public security investigation and that the company was actively cooperating with the request.

It was unclear if the four were being detained or had legal representation.

Eight CITIC employees were being investigated for suspected illegal securities trading, Xinhua has previously said.

It has not said if that investigation is linked to the one involving the CSRC official.