Court Outs Details of Chinese Private Equity Magnate Xu Xiang’s Trial

Yicai

2016-12-06

(Yicai Global) Dec. 6 -- The Qingdao Intermediate People’s Court in China’s eastern Shangdong province released details of its trial of the stock market manipulation case involving top Chinese private equity star Xu Xiang and his partners. Xu opened numerous securities accounts in the name of his wife and nearly 100 relatives and staff, and used these for stock transactions.

Xu and his partners appeared in court yesterday. Per a news article the Qingdao Intermediate People’s Court posted on its official Weibo account today, in 2010-2015, Xu and his partners colluded with the chairmen and actual controllers of 13 listed companies, who manipulated the timing and contents of disclosures of “high share dividend” plans and announcements of earnings and positive news -- such as emerging investment hotspots. They successively traded in relevant stocks using the corporate and personal securities accounts owned by Zexi Investment Co. controlled by Xu. Both sides cashed in on stock transactions by manipulating the transaction prices of shares in the listed companies.

At trial, the prosecution presented more than 1,000 items of evidence implicating the defendants in stock market manipulation, including documentary evidence, witness testimony, expert opinions, and defendant confessions. “None of the three defendants defended against the criminal allegations the public prosecutor asserted,” the court said. All pled guilty and averred their willingness to submit to punishment, throwing themselves on the mercy of the court, which will pronounce its judgment at a suitable time.

Xu, who has only a high school education, was once the best-known private equity trader in China. He was arrested in Nov. 2015 on stock market manipulation and insider trading charges. Chairmen and actual controllers of 13 listed companies including Deluxe Family Co. [SHA:600503], Shanghai Metersbonwe Fashion & Accessories Co. [SHE:002269], Letong Chemical Co. [SHE:002319], Shanghai Xinmei Real Estate Co. (*Special Treatment) [SHA:600732] and Wenfeng Great World Chain Development Corp. [SHA:601010] appeared in court alongside Xu. The court disclosed no details about the executives of these listed companies in its opinion, however.