Chinese stock regulators slap record $870 million fine in share-price manipulation scandal

Xiamen Beibadao Group made a 945 million yuan ($150 million) profit by using 300 trading accounts to manipulate share prices of two banks and an aluminum maker, the China Securities Regulatory Commission, above, said. (AP)
Updated 14 March 2018
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Chinese stock regulators slap record $870 million fine in share-price manipulation scandal

BEIJING: China’s securities regulator said Wednesday it fined a company a record 5.5 billion yuan ($870 million) for manipulating share prices in the latest scandal to roil the country’s turbulent markets.
Xiamen Beibadao Group made a 945 million yuan ($150 million) profit by using 300 trading accounts to manipulate share prices of two banks and an aluminum maker, the China Securities Regulatory Commission said. It gave no details of possible criminal charges against employees. Phone calls to the CSRC weren’t answered.
China’s securities industry has been battered by scandals since a 2015 stock market crash that prompted a multibillion-dollar government intervention to prop up prices.
A prominent trader was sentenced last year to 5½ years in prison for share-price manipulation and the general manager of the country’s biggest brokerage was arrested in 2016. Other brokerages disclosed they were under investigation.
Beibadao Group is China’s largest privately-owned operator of railway cargo cars, according to news reports.
Its traders took advantage of a reduction in the number of shares available for trading following the 2015 crash due to government-ordered buying by big investors, according to business news website Tencent Finance. It said that allowed Beibadao to boost prices while buying fewer shares.
The government announced plans Tuesday to combine China’s banking and insurance regulators in an effort to improve supervision of those industries amid a campaign by the ruling Communist Party to control financial risks and surging debt levels. There was no mention of possible changes to the CSRC, the third financial regulator.


OPEC oil ministers gather to discuss production increase

Updated 19 June 2018
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OPEC oil ministers gather to discuss production increase

  • Analysts expect the group to discuss an increase in production of about 1 million barrels a day
  • The officials were arriving in Vienna ahead of the official meeting Friday

VIENNA: The oil ministers of the OPEC cartel were gathering Tuesday to discuss this week whether to increase production of crude and help limit a rise in global energy prices.
The officials were arriving in Vienna ahead of the official meeting Friday, when they will also confer with Russia, a non-OPEC country that since late 2016 has cooperated with the cartel to limit production.
Analysts expect the group to discuss an increase in production of about 1 million barrels a day, ending the output cut agreed on in 2016.
The cut has since then pushed up the price of crude oil by about 50 percent. The US benchmark in May hit its highest level in three and half years, at $72.35 a barrel.
Upon arriving, the energy minister of the United Arab Emirates, Suhail Al Mazrouei, said: “It’s going to be hopefully a good meeting. We look forward to having this gathering with OPEC and non-OPEC.”
The 14 countries in the Organization of the Petroleum Exporting Countries make more money with higher prices, but are mindful of the fact that more expensive crude can encourage a shift to renewable resources and hurt demand.
“Consumers as well as businesses will be hoping that this week’s OPEC meeting succeeds in keeping a lid on prices, and in so doing calling a halt to a period which has seen a steady rise in fuel costs,” said Michael Hewson, chief market analyst at CMC Markets UK
The rise in the cost of oil has been a key factor in driving up consumer price inflation in major economies like the US and Europe in recent months.
Already US President Donald Trump has called on OPEC to cut production, tweeting in April and again this month that “OPEC is at it again” by allowing oil prices to rise.
Within OPEC, an increase in output will not affect all countries equally. While Saudi Arabia, the cartel’s biggest producer, is seen to be open to a rise in production, other countries cannot afford to do so. Those include Iran and Venezuela, whose industries are stymied either by international sanctions or domestic turmoil. Iran is a fierce regional rival to Saudi Arabia, meaning the OPEC deal could also influence the geopolitics in the Middle East.