RFA published an article stating that the arrest of Xu Xiang, former Chinese private placement investor and the General Manager of Zexi Investments (泽熙投资), a Chinese investment company, and Chen Boming, General Manager of CITIC securities, reveals that the stock market in China is full of hidden plots from which a small group of people have benefitted. The market should have been regulated a long time ago.
RFA interviewed an economics professor from the Beijing Institute of Technology who observed, “The China Capital market is no doubt the darkest market; it is full of hidden trades behind closed doors and involves a number of illegal activities. It has been used to supply funding to the failing SOEs. A large number of low performance companies have been repackaged and have gone through the IPO procedure. A small number of special interest parties, who use their power to manipulate the market, were the ones backing them. Xu Xiang and Chen Boming are just two of the examples of this special interest group. The supervision and regulatory department should use this opportunity to establish regulations for the Chinese stock market and make it more transparent.”
Source: Radio Free Asia, April 29, 2016