The names of the 125 securities branches involved in the China
Venture Capital stock manipulating case were released in court
Tuesday in Beijing.
The institutions, including branches of some big securities
companies in China, allegedly offered as much as 5.4 billion yuan
(US$653 million) of funds to the two main price-rigging suspects,
Lu Jianxin and Zhu Huanliang, helping them open accounts under
different names to trade and manipulate stocks.
The case, one of the biggest stock scandals in China, is entering
the fifth day of trial by the No.2 Beijing Intermediate People's
Court.
The case was originally planned to last for three days starting
from last Tuesday, but was later prolonged for another two days
this week.
After the inquiry process, prosecutors got necessary proofs of the
seven suspects detained. The court is expected to start hearing the
defense case today and, if possible, finish the trial.
But insiders said it is very unlikely for the court to come to any
verdict today because of the complexity of the case and time
required for a conclusion.
The two main suspects, Lu and Zhu, are still at large, making the
handling of the case and acquisition of proofs more difficult.
However, it was the first time for prosecutors in China to launch
lawsuits against price-riggers, marking a major breakthrough in the
securities regulatory framework and the legal system.
Lu
and Zhu allegedly acquired huge funding from the 125 securities
institutions between December 1998 and January 2001 and placed the
funds in more than 1,500 accounts, through which they bought and
propped up the stock price of Shenzhen-listed China Venture Capital
to abnormal highs. But the stock plunged at the end of 2000 when
Lu's funding chain broke down.
The China
Securities Regulatory Commission probed into the matter then,
but finally passed it on to the judicial departments.
However, the mountain-high paper documents and evasion of the main
suspects have given judges who are inexperienced in handling such
cases a hard time.
Moreover, even if the court could come up with a quick verdict, it
would still be of little help to the individual stock holders who
suffered losses in the manipulation as it was hard for them to
launch civil suits against the price-riggers.
(China
Daily June 20, 2002)