Source: GT Published: 2024-02-05

Safeguarding investor interests stands as the paramount focus in addressing cases of securities violations, a Chinese official said on Sunday, emphasizing a “zero tolerance” approach in cracking down on securities crimes so as to cultivate a law-based market environment.

Adhering to the primary tone of strict enforcement, prosecutorial authorities at all levels have been rigorously and comprehensively prosecuting securities crimes such as financial fraud, misappropriation of assets in listed companies, insider trading, market manipulation and other crimes, Zhang Xiaojin, head of the fourth prosecutorial office of China's Supreme People’s Procuratorate (SPP), said in an online interview published on the SPP’s website.

The aim is to promote the formation of a law-based market environment in which people dare not and cannot commit crimes, consciously regulate themselves, and do not step across red lines, Zhang said.

Providing robust support for the expedited development of a standardized, transparent, open, dynamic and resilient capital market is a clear focus in fulfilling prosecutorial responsibilities, Zhang noted.

In the past year, the SPP handled a number of financially related criminal cases with significant societal impact.

For instance, Wu Hougang, the former chairman of Dalian Zhangzidao Fishery Group, was sentenced to 15 years in prison and fined 920,000 yuan ($127,900) on multiple charges, including illegal disclosure of important information, fraud and offering bribes, according to media reports in December 2023.

From January to November 2023, prosecutorial authorities approved the arrest of 11,060 individuals involved in disrupting the financial regulatory order and financial fraud. Additionally, charges were brought against 22,529 individuals, with offenses predominantly concentrated in crimes such as illegal fundraising and loan fraud.

In the same period, national prosecutorial authorities filed 117 cases related to securities crimes, up 42.7 percent year-on-year, SPP data showed.

Robust efforts have been made in recovering losses and protecting investor rights in accordance with the law. The commitment to pursuing recovery and compensation is consistently integrated throughout the legal process, with a steadfast adherence to the principle of “recovering to the fullest extent possible,” Zhang stressed.

This also marks the latest endeavor by Chinese officials in their recent efforts to boost market confidence amid stock market volatility.

China will make more efforts to build an investor-centered capital market. “It is only when investors are well-protected that there will be a solid foundation for a prosperous market,” Wang Jianjun, vice chairman of the China Securities Regulatory Commission, recently said in an interview with the Xinhua News Agency.

Experts noted that prosecutorial efforts in combating illegal activities within the capital market play a pivotal role in preventing and resolving financial risks.

Prosecutorial authorities have undertaken great efforts in recent years to combat illegal activities in the capital market, Dong Shaopeng, a senior research fellow at the Chongyang Institute for Financial Studies at the Renmin University of China, told the Global Times on Sunday.

While substantial efforts have been made, there are still shortcomings in addressing issues related to the protection of the rights of ordinary investors, both in terms of institutional and legal frameworks, Dong said.

Zhang vowed that prosecutorial authorities will continue to intensify efforts in combating financial crimes in key areas in 2024, upholding economic and financial order, stabilizing societal expectations and boosting confidence in development. By leveraging the power of the rule of law, efforts will be made to propel high-quality development in the financial sector.