(Yicai Global) July 11 -- Shares of China Securities fell by as much as the daily exchange-imposed limit despite the brokerage saying it has no business relations with Camsing International Holding, a media and entertainment company caught up in a fundraising fraud.
China Securities' Shanghai-listed stock [SHA:601066] closed 4.6 percent lower at CNY20.29 (USD2.95), recovering from a 10 percent plunge earlier in the day. In Hong Kong, the firm's shares gained 0.9 percent.
Shanghai police recently arrested Luo Jing, who founded and controls Camsing International Holding, for fraud. Media reports suggested Beijing-based China Securities has business relations with Camsing after asset manager Noah Holdings said it has CNY3.4 billion (USD495.1 million) worth of products backed by conglomerate Camsing Global's accounts receivables at risk of default.
China Securities said today that it was the financial consultant for China Base Group, Camsing's shareholder, in the acquisition of Hong Kong-listed Fittec International Group in 2015, with the deal completed in 2016.
China Securities provided HKD700 million (USD89.5 million) of financing credit for the purchase. China Base Group used HKD500 million and gave China Securities equity and HKD200 million as collateral, according to the statement.