Chinese financial reporter makes on-air ‘confesssion’ after market chaos

31 Aug 2015 | Author: | No comments yet »

China arrests nearly 200 in stock market crackdown.

A journalist from one of China’s top financial magazines has been paraded on state television to make an on-air “confession” for supposedly triggering stock market chaos with his reporting. China has arrested nearly 200 people for online rumour-mongering about the country’s stock market collapse and the recent fatal chemical factory explosions in the northeastern port of Tianjin, as well as other financial wrongdoing, the official state news agency Xinhua reported on Monday.Beijing: China’s main state broadcaster on Monday paraded a financial journalist “confessing” to causing the stock market “great losses” as authorities seek to rein in a rout on the exchanges.

In footage broadcast Monday morning on CCTV, China’s state broadcaster, a weary-looking Wang said he obtained information about China’s securities regulator “through private channels” and then added his “own subjective judgment” to the report. “During a sensitive period, I should not have published a report which had such a huge negative impact,” he said.China’s stocks fell, capping the benchmark index’s biggest two-month tumble since 2008, amid concern that government intervention to prop up the market will fail. Xinhua quoted a statement by the ministry of public security issued over the weekend which said those punished in the campaign had expressed repentance over their misconduct that had “caused panic, misled the public and resulted in disorders in stock market or society.” The arrests come after China’s stock market has seen huge losses since it peaked in mid-June, and worries about economic growth have added to jitters. Wang Xiaolu, a journalist with the respected business magazine Caijing, was held after writing a story in July saying the securities regulator was studying plans for government funds to exit the market. The high-profile — and deeply problematic — forced apology came amid a broader crackdown as Chinese authorities struggle to cope with the fallout from the Tianjin blasts and the ongoing stock crisis.

Their appearance came hours after a midnight announcement that both men and four executives of the brokerage, including managing director Xu Gang, were being formally held. Weeks of stock market turmoil have sent political shockwaves coursing through Beijing, with some now openly questioning the future of prime minister Li Keqiang and others attacking president Xi Jinping’s botched handling of the financial debacle. “I shouldn’t have published the report at such a sensitive time, especially when it could have great adverse impact on the market,” he said. “I shouldn’t have caused our country and shareholders such great losses just for the sake of sensationalism and eye-catchiness. “I’m regretful of what I have done and am willing to confess my crime.

Beijing has launched interventions on a grand scale to try — with little success — to shore up plunging share prices after a debt-fuelled bubble burst in June. The six people, plus another four Citic Securities executives and a former staff of the China Securities Regulatory Commission (CSRC), the market watchdog, were “assisting police in their investigation” into a suspected insider trading case last week. Britain’s Financial Times reported at the weekend that China had decided to stop buying shares in favour of intensifying a crackdown on those “destabilising” the market, although there was speculation as recently as last Thursday that government funds were acquiring stock.

Since an epic stock boom went bust this summer, China’s government has struggled to contain the crisis, ordering the press to downplay the story, and periodically singling out scapegoats, from hostile foreign forces, to “malicious” short-sellers, to the U.S. The journalist was suspected of “colluding with others and fabricating and spreading fake information on securities and futures market,” Xinhua reported. It cost the country and investors very big losses.” Mr Wang was taken away by police on August 25th, a day after the main Chinese share index, the Shanghai Composite Index suffered its biggest one-day percentage fall in eight years and sparked fear in global financial markets that the world’s second biggest economy was in trouble.

China has unleashed an unprecedented package of support measures, including using state-backed entities to buy stocks and cracking down on “malicious” short-selling — when investors sell shares they do not own in anticipation of a fall in their price. In an article published on July 20 – soon after the government unleashed hundreds of billions of yuan to rescue the beleaguered market – Wang wrote that the CSRC was preparing an exit plan.

Those made to broadcast such statements include Gao Yu, a veteran journalist jailed in April for leaking an internal Communist party document, Charles Xue, a venture capitalist and blogger, and Peter Humphrey, a British private investigator who was released from prison in June after nearly two years behind bars. The four executives included managing directors Xu Gang and Liu Wei, who admitted alleged insider trading, and the industry was told to contribute another 100 billion yuan (€14 billion) to a stock market rescue fund. Swings in Chinese markets this month have rattled investors worldwide as they struggle to anticipate policy actions in the world’s second-largest economy. “There is a lot of confusion about purchases of stocks by state-linked funds,” said Gerry Alfonso, a sales trader at Shenwan Hongyuan Group Co. in Shanghai. “Disclosures are very limited so it is impossible to know what they are doing with certainty.” The CSI 300 Index rose 0.7 percent after slumping as much as 4.1 percent earlier. Speaking earlier this month, Eva Pils, an expert in Chinese law from King’s College London, said so-called televised confessions were being used more and more against government critics including human rights activists, journalists and lawyers. “I have heard previously of people being forced to make statements in front of a camera without that later being shown,” Pils said. “But I think that now clearly … they have also tried to get these filmed confessions and to broadcast them. “The authorities want to use the television confession as a means of censorship,” said Qiao Mu, an outspoken journalist professor from Beijing’s Foreign Studies University. The CSRC denied the report the day it was published, calling it “irresponsible.” More than a month later, with CSRC indeed taking a more hands-off approach, and Chinese markets experiencing another precipitous drop, Wang was detained for spreading “false information.” Reporters without Borders condemned Wang’s detention and called for his release. “Suggesting that a business journalist was responsible for the spectacular fall in share prices is a denial of reality, “said Christophe Deloire, the group’s secretary-general, according to a statement published on their Web site.

David Bandurski from the University of Hong Kong’s China Media Project told the Financial Times: “This isn’t about the factual nature of his reporting, it’s about the political impact. In China high-profile criminal suspects are regularly paraded on television apparently confessing to their actions, in what rights lawyers say is a violation of criminal procedure. A leaked government propaganda directive from July said: “Do not conduct in-depth analysis, and do not speculate on or assess the direction of the market.

Citic Securities said in a statement on Sunday that it was “proactively cooperating” with authorities and had taken steps to scrutinise and correct its various businesses, “especially ‘innovative’ ones”. The Shanghai market closed down 0.82 percent on Monday, while Citic Securities dropped nearly five percent, in part because of the regulatory crackdown, dealers said.

Hong Kong’s bourse will be closed on Thursday. “It look like that the government is buying shares today,” said Li Jingyuan, general manager of the securities investment department at Shanghai Zhaoyi Asset Management. “They still want to stabilize the market at this level.” The Shanghai gauge will stabilize in a range between 2,700 and 3,000, David Gaud, senior fund manager at Edmond de Rothschild Asset Management, wrote in an e-mail. Gree Electric Appliances Inc., China’s largest manufacturer of air-conditioners, dropped 5.4 percent after saying its first-half net income rose 0.05 percent from a year earlier. Puts that pay out on a 10 percent drop in the China 50 exchange-traded fund cost 9.3 points more on Monday than calls betting on a 10 percent gain, according to implied volatility data on one-month contracts. For the U.S.-listed Deutsche X-trackers Harvest CSI 300 China A-Shares ETF, the skew reached a record 38 points on Aug. 27 and closed the week at 28 points.

Here you can write a commentary on the recording "Chinese financial reporter makes on-air ‘confesssion’ after market chaos".

* Required fields
Twitter-news
Our partners
Follow us
Contact us
Our contacts

About this site