Journalist 'confesses' to causing China stock market panic

'DEEPLY SORRY': Mr Wang apologised for his story which said the securities regulator was studying plans for government funds to exit the market.


    Sep 01, 2015

    Journalist 'confesses' to causing China stock market panic


    CHINA'S main state broadcaster CCTV yesterday paraded a financial journalist "confessing" to causing the stock market's "great losses", as the authorities seek to rein in a rout on the exchanges.

    Wang Xiaolu, a journalist with the respected business magazine Caijing, was held after writing a story on July 20 saying the securities regulator China Securities Regulatory Commission (CSRC) was studying plans for government funds to exit the market, Agence France-Presse reported.

    CCTV showed Mr Wang as saying that he had sought to create a stir and catch the eyes of readers with his articles.

    "I should not have published a report that heavily and negatively affected the market at such a sensitive time...(I) caused such great losses to the country and stock investors. I am deeply sorry," he said.

    The state-owned news agency Xinhua said Mr Wang was held for fabricating and spreading fake information which had "caused panic and disorder at (the) stock market, seriously undermined market confidence, and inflicted huge losses on the country and investors".

    Beijing has launched interventions on a grand scale to try - with little success - to shore up plunging share prices after a debt-fuelled bubble burst in June.

    Britain's Financial Times reported on the weekend that China had decided to stop buying shares in favour of intensifying a crackdown on those "destabilising" the market, although there was speculation as recently as last Thursday that government funds were acquiring stock.

    The Ministry of Public Security also said on the weekend that 197 people had been punished for "spreading online rumours" on several issues, including the markets and giant, deadly blasts in the port of Tianjin on Aug 12.

    China has unleashed an unprecedented package of support measures, including using state-backed entities to buy stocks and cracking down on "malicious" short-selling - when investors sell shares they do not own in anticipation of a fall in their price.

    But the moves have done little to calm investors, and concerns over the health of China's economy and its ability to manage its finances has infected world markets, sparking one of the worst global sell-offs on Aug 24 since the financial crisis.

    Journalists' rights group Reporters Without Borders last week said it was "absurd" to blame China's stock-market crash on a reporter and called for Mr Wang's immediate release.

    After his report appeared in Caijing, the CSRC quickly denied it, labelling it "irresponsible". But Caijing said in a statement it "defended journalists' rights to do their duty under the law".

    Meanwhile, the authorities have also detained CSRC official Liu Shufan on suspicion of insider dealings, taking bribes and forging official seals, said Xinhua.

    Citic Securities executives, including managing directors Xu Gang and Liu Wei, admitted to alleged insider trading, said the agency.