China

China media: Anger over trading error

  • 19 August 2013
  • From the section China
Yuan notes
Image caption Media feel Friday's trading error will erode investors' confidence in China's securities market

Media in China are demanding an investigation into the chaotic surge in Shanghai's stock exchange triggered by what many described as an "own goal" trading error on Friday.

The Shanghai stock market went on a roller coaster ride after an apparent trading error that led China Everbright Securities, a major mainland brokerage firm, to make billions of yuan of buying orders within seconds during the morning trading on Friday.

Shanghai Composite index jumped 5.6 per cent in a flash on Friday morning, but ended the day with a loss of 0.6 per cent.

China's securities watchdog says the chaotic trading was caused by "design flaws" in China Everbright Securities' computer-based automated trading system and "obviously inadequate" internal risk controls.

However, some industry insiders and traders are making calls in the media for an investigation into possible market manipulation behind the firm's "own goal".

The China Daily says some are also dismissing reports that a trader may have made a buy order, thinking it was on a virtual trading system, when it was on a computer connected to the real exchange market.

"I've still got a lot of doubts and questions. In general there is a firewall between the two computers, and any big purchasing order should be approved by the compliance department," Yang Guoying, a researcher with China Finance Thinktank, tells the newspaper.

One director of an investment agency was incredulous at how such a massive purchase could be made without prior approval and called the transaction "a serious fraud, manipulation and disruption of the stock market" in an interview with The Beijing News.

"If Everbright Securities are not punished, the trustworthiness of China's securities market will drop from the 17th level of Hell into the 18th level of Hell," says Ye Tan, a financial commentator for Shanghai's National Business Daily, in her call for full compensation for short-sellers who suffered losses.

Meanwhile, a New York Times online report on JP Morgan Chase facing a US probe for allegedly hiring "princelings" - the children of senior Chinese officials - to boost its business in China, has been picked up in the mainland press, but there has been little comment so far.

Shock at 'baby-throwing'

Turning to other news, the Southern Metropolis Daily says a former top official at China's top economic policy-making body, Liu Tienan, has been placed under criminal investigation for suspected bribe-taking.

Just days ahead of the long-awaited corruption trial of fallen Chongqing party chief Bo Xilai that begins on Thursday, many media are paying tribute to an outspoken senior forensic scientist who has resigned in frustration over the standard of forensic evidence presented in trials.

Wang Xuemei, who quit as vice-president of the Chinese Forensic Medicine Association, had previously questioned the government's inquest into the murder of Briton Neil Heywood, whom Gu Kailai, Mr Bo's estranged wife, was convicted of poisoning.

Ms Wang said in her resignation video on Saturday that her name could not be related to an academic organization that offers "ridiculous and irresponsible" conclusions.

"We would like to pay tribute to Wang Xuemei not only because of her long-standing professional commitment, but because she was brave enough to expose shady dealings in the industry, as well as vowing to defend the bottom line of the industry to the death," says a Beijing Youth Daily commentary.

Hong Kong's South China Morning Post gives details of an open letter signed by 70 police officers in Guizhou province accusing the acting president of the Shanghai High Court of corruption and abuse of power during his time as a provincial police chief.

Finally, the media are shocked at another "baby-throwing" incident that has gone viral on the internet, but this time there is even greater outrage because the alleged perpetrator is a policeman.

The Southern Metropolis Daily says the arrested suspect, Guo Zengxi, should be severely punished if found guilty of taking a 7-month-old girl from her father's arms, lifting her up and then throwing her to the ground.

The Beijing News asks why the police officer was not investigated until last Saturday, when the alleged incident took place on 20 July.

A similar case occurred on 23 July when a Beijing man allegedly picked up and threw a two-year-old girl to the ground during a dispute with her mother over a parking space. The girl later died.

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