Insider trading netted millions for corrupt CEO
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The former chief executive officer of China Galaxy Securities Co has been sentenced to death with a two-year reprieve for taking bribes of 15.46 million yuan (US$2.38 million) and profiting by nearly 100 million yuan from insider trading.
Xiao Shiqing, 47, was also a former senior official of China's top securities supervisor who decided the fate of hundreds of companies planning to list on the mainland stock markets.
The verdict imposed on Xiao is the latest in connection with the activities of Xiao, Wang Yi, a former vice chairman of China Securities Regulatory Commission and vice president of China Development Bank, and several other heads of domestic brokerages.
Xiao took over Galaxy Securities in 2007 after leaving the commission where he was deputy head of several departments in the late 1990s. From 1995 to 1999 he was deputy head of the department that supervised listed companies headed by Wang, according to Caijing Magazine.
In 2006, Xiao was said to have used his influence in the commission to help gain approval for an initial public offering applied for by Qingdao Kingking Applied Chemistry Co, which hired Tianjin Shunyin Technology Investment Co as a lobbyist for its listing ambition.
Shunyin was owned by Wang's brother Wang Lei and was said to have given Xiao 200,000 yuan in cash at a Beijing parking lot for his role in the success of Kingking's IPO, the Higher People's Court of Henan Province said.
In 2007, Xiao, who was then the head of Galaxy Securities, managed to get approval from the commission to allow Yeland Group Co to raise 1.2 billion yuan from issuing additional shares.
The court said Yeland, a property developer, later sold an apartment in Beijing to Xiao's family for 7.15 million yuan, well below its 16.27 million yuan market value.
In September 2006, Xiao used several stock accounts, including those under the names of his sisters and nanny, to buy 4.3 million shares of Beijing Hua'er Co after he learned the company was about to be bought out by Guoyuan Securities Co.
Wang, the former vice chairman of CSRC, was sentenced to death with a two-year reprieve in October last year for taking bribes of 11.9 million yuan.
A death penalty suspended for two years is usually commuted to life in prison.
