China`s biggest broker Citic probed for `rule violations`

Beijing: Citic Securities, China's largest brokerage firm, said Thursday it is being probed for alleged "rule violations", while several of its directors are already the subject of separate investigations.

The China Securities Regulatory Commission (CSRC) is investigating Citic Securities for "allegedly violating the Supervision and Management Regulation for Securities Brokerages," the company said in a statement filed to the Shanghai stock exchange, where it is listed.

It did not give details of the investigation.

"Citic Securities will actively assist the investigation and release any progress in a timely manner. The company is operating normally," it added. Shares in in the firm dipped one percent Thursday.

Police are separately investigating executives of the firm for insider trading and leaking inside information, the official Xinhua news agency reported in September.

They include general manager Cheng Boming, operations official Yu Xinli and the vice manager of its information technology centre, Wang Jinling.

Eight Citic officials are assisting in police investigations, according to the news service.

The probe into the brokerage giant was announced as part of a wave of measures targeting the financial sector, following the spectacular meltdown of the Chinese stock market this summer.

After soaring 150 percent in one year, the Shanghai and Shenzhen bourses went into a tailspin in June that extended into August, tumbling nearly 40 percent despite massive intervention by the authorities at a cost of hundreds of billions of dollars.

The frantic and clumsy state efforts to stop the bleeding were criticised, with a number of experts questioning the apparent contradiction with Beijing's intention to give a greater role to the market and private sector.