Securities brokerage declared bankrupt
By Hu Yuanyuan (China Daily)
Updated: 2006-08-18 09:07 "The closing down of China Southern Securities is not a surprise since it
has been an empty shell after China Jianyin Investment (JIC) took over the
company last August," said He Yuanyuan, adding bankruptcy is a must to clear up
its debts.
JIC is a spin-off from the China Construction Bank designed to
take charge of the State-owned lender's non-banking business. After the
acquisition, China Jianyin Investment Securities emerged and has become the
fourth-largest brokerage in Shenzhen.
Established in 1992, China Southern
Securities used to be a heavyweight in the sector. It increased its registered
capital from 1 billion yuan (US$125 million) to 3.45 billion yuan (US$425.4
million) in 2002.
But due to poor management and embezzlement of a
substantial amount of capital, the China Securities Regulatory Commission (CSRC)
and the local government took it over at the beginning of 2004 before announcing
its closure in April 2005.
The central government injected 8 billion
yuan (US$1 billion) into the debt-ridden trading house early last year when it
was revealed that it had misappropriated 8 billion yuan (US$1 billion) of
clients' money. But the efforts failed to revive the brokerage.
Since
2005, the industry watchdog has been reshuffling the securities sector, which
had been in the doldrums for four years.
But most of China's 130
securities firms have bounced back this year due to the strong stock market
rebound.
The benchmark Shanghai composite index has risen 60 per cent
since the start of the year, helped by the non-tradable shares reform and new
initial public offerings.
Experts estimate the revenue of most securities
firms will double this year.
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