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The trial of Shenzhen China Venture Capital Company case, China's largest stock price manipulation case, clearly demonstrates China's determination to curb securities trade fraud and enhance order in the market, said a senior Chinese official.
Li Guoguang, vice-president of China's Supreme People's Court (SPC), said that since the Chinese stock market was established in 1990, China has spared no efforts to build a fair, open and transparent market.
He added that the trial, which was closely watched by many Chinese shareholders, could be regarded as a very important step forward for better market control.
The six suspects have been jailed for two to four years and fined between 100,000 and 500,000 yuan (US$12,070 to 60,400) following the trial at the Beijing's No.2 Intermediate People's Court.
Li noted that fraud must be punished severely in order to safeguard market order and the interests of investors.
Under China's criminal law, stock price manipulators can be sentenced to up to five years in prison.
Inadequate access to information and outdated investment methods make small and individual investors the first and worst sufferers of stock price manipulation, Li said.
He told the reporter that the China Securities Regulatory Commission (CSRC) and the SPC recently issued specific regulations to deal with stock trading fraud via fraudulent messages released by listed companies, Li said.
According to the statistics from the CSRC, China has about 68 million shareholders, most of whom are small and individual investors.
Li also revealed that the drafts of China's civil law and securities investment funds law are currently being reviewed by the Standing Committee of the National People's Congress, China's top legislative body.
The Shenzhen China Venture Capital Company case, which involved more than 5.4 billion yuan (US$652 million) in funds garnered from more than 100 companies and individuals, is the country's largest stock price manipulation case to date.
At the end of 2000 and early 2001, the China Venture Capital Company case triggered panic among investors, and its stocks lost two thirds of its market value in less than a month.
(Xinhua News Agency April 3, 2003)
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