Stock regulator: China plans to 'capture' suspects abroad

AP News
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Posted: Feb 10, 2017 5:55 AM

BEIJING (AP) — China plans to have people abroad who are accused of financial market misconduct "captured and returned," the country's stock regulator said in comments reported Friday by news outlets.

The reports follow the disappearance from Hong Kong of a Chinese-born Canadian founder of an investment company and arrests of leading securities industry figures following the collapse of a stock market boom.

The chairman of the China Securities Regulatory Commission said at a staff meeting Friday that "capital crocodiles" would be stopped from hurting investors, according to the business magazine Caixin and news websites.

"The capital market doesn't allow 'big crocodiles' to do whatever they want, stripping the flesh and drinking the blood of retail investors," the reports said, citing the regulator, Liu Shiyu. He was cited as saying Bejiing "will have 'capital crocodiles' captured and returned in a planned way."

The reports did not indicate whether Liu meant Beijing might send its own representatives after fugitives or ask other governments to detain and repatriate them.

An official of the securities agency's press office, Zhou Qian, confirmed the agency held a staff meeting Friday but would not confirm whether Liu made the comments.

Beijing already is in the midst of a worldwide effort to catch and repatriate Chinese government officials, business figures and others accused of corruption and financial misconduct.

The latest reports follow the disappearance of Xiao Jianhua, the billionaire founder of investment group Tomorrow Holding, from Hong Kong on Jan. 27.

Chinese authorities have not confirmed reports mainland police took Xiao from his hotel. Hong Kong is Chinese territory but has its own legal system and mainland police are supposed to ask its government's permission to detain a suspect.

A family member reported Xiao missing but withdrew the report a day later after hearing he was safe, Hong Kong police say. Messages posted in his name on his company's social media account said he is undergoing medical treatment and would return soon. A Hong Kong newspaper ad carried the same message.

Authorities launched investigations of China's securities industry in 2015 after a stock market boom collapsed, inflicting heavy losses on small investors.

A week before Xiao's disappearance, one of China's most prominent stock traders, Xu Xiang, was sentenced Jan. 23 to 5½ years in prison on charges of manipulating stock prices.

Also, the general manager of China's biggest brokerage, state-owned Citic Securities Ltd., and two other executives were arrested on insider trading charges last April. Two other brokerages have said they were under investigation, but no arrests were reported.

China's market benchmark soared more than 150 percent beginning in late 2014 after the state press said stocks were cheap. Prices peaked in June, 2015, and then collapsed, with the main market index falling 30 percent in a few weeks.

The police ministry accused securities firms in July, 2015, of manipulating prices but released no details at that time. That prompted suggestions the ruling Communist Party was trying to deflect blame for the collapse.