BEIJING (AP) – Two major Chinese brokerages announced they are under investigation in the latest aftershock of this summer’s market plunge, sending share prices sharply lower Friday.
The Shanghai Composite Index ended the day down 5.5 percent after declining as much as 6.2 percent earlier. Declines were led by Citic Securities Ltd. and Guosen Securities Ltd., which fell by the 10 percent daily limit after both said Thursday they were under investigation. Neither gave details.
Authorities have detained securities executives, an investment fund manager, government employees and a reporter for a business magazine following the collapse in prices that began in early June. The announcements that brokerages themselves were under investigation represented a further widening of the probes.
The investigations were seen by many as an attempt by the ruling Communist Party to deflect blame for the 30 percent fall by the Shanghai index after state media encouraged the public to buy stocks.
Citic is China’s biggest brokerage and part of Citic Group, the Cabinet’s main holding company. Guosen is one of the country’s 10 biggest securities firms.