Former china stock brokerage head under trial

Beijing, July 19 (PTI) A former president of a leading
stock brokerage in China has gone on trial on charges of
insider-trading in south China.

Dong Zhengging, former president of Guangfa Securities,
China’s sixth largest brokerage, denied the charges against
him in connection with the company’s 2006 stock market debut
at the trial in a court at Guangzhou in Guangdong province.

Dong was accused of tipping off the Guangfa Securities
reverse-merger listing on the Shenzen Stock Exchange to his
younger brother Dong Dewei and former classmate Zhao Shuya.

The three defendants denied their culpable confessions in
court, saying they made those statements under intimidation
and inducement by police, official Xinhua news agency said.

The brokerage went public on reverse merger of the Yan
Bian Raod, a Shenzen Stock exchange listed stock on June 2 in
2006. The market speculation on the Guangfa Securities
back-door listing drove up the Yan Bian Raod stock, whose
price rose from USD 0.4 to USD 1.1 between March and June 3,
it said.

Dong insisted in court that he was not involved in the
listing procedure and on June 2, 2006, he was on a business
trip to southern Yunnan province.

He also maintained that the listing was conducted by two
of his partners and he only heard about it. Since he was not
involved in the trade, there was no way he could have tipped
off as early as in February 2006, when his relatives began
buying the Yan Bian Raod stock, he said.

Dong Dewei and Zhao Shuya were charged with profiteering
USD 73,331 and USD 14,666.2, respectively, from selling the
stock afterwards. Both denied they bought the stock after a
tip-off from Dong, thus denying their earlier confessions.

In their testimonies, the Guangfa executives said though
Dong did not conduct the trade in person, he played pivotal
role in key decision makings.