Approval of IPOs may be at heart of probe by China’s chief securities watchdog
Chinese authorities are investigating the head of the investor protection department of the country’s chief securities regulator in connection with allegations of violating the law, according to a statement from the China Securities Regulatory Commission (CSRC).
China’s Central Commission for Discipline, the anti-corruption commission that has been heading up a nationwide crackdown on corruption, is investigating Li Liang, who currently heads the CSRC’s investor protection bureau, for ‘violating laws and disciplines,’ the regulator says in the press release.
Until 2012 Li was in charge of the CSRC office that reviewed IPO requests from Chinese companies seeking to list on the ChiNext Board of the Shenzhen Stock Exchange, according to local media reports. His detention comes one month after the arrest of Ling Wancheng, a businessman who had six IPO requests approved by Li, according to Chinese newsletter Caixin Online. It reports that authorities found a series of discrepancies in information in the prospectuses of the companies.
The investor protection bureau of the CSRC was founded in 2012 to handle investor complaints and promote investor education and whistleblowing. The bureau is also meant to increase security for foreign investors and promote Chinese stock ownership abroad.
Chinese authorities have been conducting a nationwide crackdown on corruption since 2012 that has focused mainly on government bureaucrats. About 250,000 officials have been detained or questioned so far in the campaign. According to a leaked report from China’s central bank, 18,000 corrupt state officials have stolen a combined total of $123 bn in recent years and fled overseas, mainly to the US, Canada and Australia.
