China's embattled top securities regulator, Xiao Gang, has offered to resign, sources said, after perceived mismanagement wiped more than $5 trillion off the capitalization of the Shanghai and Shenzhen stock markets since they peaked last June.
But China's securities regulator said on Monday that the report its chairman was offering to resign is inaccurate.
The 57-year-old chairman of the China Securities Regulatory Commission (CSRC) tendered his resignation last week after his brainchild, a "circuit breaker" mechanism to limit stock market losses, was blamed for exacerbating a sharp sell-off, a source with ties to the leadership and a financial industry source told Reuters. The "circuit breaker" was deactivated on Jan. 7, just three days after its introduction.
"The (Communist Party) central (leadership) is extremely unhappy with Xiao Gang. It is certain he will change jobs," the source close to the leadership said, adding it was unclear where he would go next.
"Xiao Gang handed in his resignation last week," said the financial industry source.
Both sources requested anonymity because they were not authorized to speak to the media.
It's unclear whether Xiao's resignation offer has been accepted by the central government. The CSRC did not immediately respond to requests for comment.