Regulators have seized control of four indebted Chinese brokerages in a bid to clean up the country's beleaguered financial sector, official newspapers said on Saturday.
The China Securities Regulatory Commission took over D'Hong Securities, Hengxin Securities, China Fortune Securities and Hantang Securities after the close of stock market trade on Friday, the Shanghai Securities News said.
The first three are units of troubled ketchup-to-finance conglomerate Delong (Group) Co Ltd, the English-language Shanghai Daily said.
State media reports have asserted that Delong had misused at least six billion yuan ($725 million) in funds and the amount had either vanished, been frozen, or been tied up in lawsuits.
Company executives have declined to comment.
The assets of Delong and its listed arm, Xinjiang Tunhe Investment Co, were seized by a government debt-clearing agency on August 31, Tunhe has said.
Assets of three other Delong units - auto parts maker Torch Investment Co, machinery maker Hejin Holding Co Ltd and Xinjiang Tianshan Cement Co Ltd - were also seized, the companies have said.
Beijing is trying to overhaul a loss-making, overcrowded securities industry even as it seeks to clean up a debt-laden financial sector, and offer companies another way to raise capital without resorting to bank loans.
Nearly half of the more than 50 houses that had posted interim results by late July had reported losses in the first six months of 2004, state media have said.
Regulators launched a shake-up of the sector this year by seizing control of China Southern Securities, the fifth-largest brokerage by paid-up capital, citing mismanagement.
Comments
Comments are closed.