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Chinese major press has recently reported the arrest of Wang Xiaoshi, a CSRC (China Securities Regulatory Commission) official who allegedly took bribes to disclose the identities of persons on Stock Issuance Examination Committee (SIEC) |
According to the reports, Wang worked as an official at the CSRC’s Listing Regulatory Department serving as a liaison with SIEC, formed of 25 (80 a year ago) people including officials, securities professionals and experts, who had authority to recommend approval of specific issuance applications.
The SIEC reviews applications to publicly issue stock on the Chinese mainland's exchanges and recommends action to the CSRC. Ostensibly SIEC members are independent of the CSRC.
Under the related securities act in effect from 1999 to 2003, the identities of SIEC members were to be kept secret, aiming to shield SIEC members from corruption. However, this couldn’t prevent prospective issuers from seeking the right persons for "communication" purpose.
Mr. Wang apparently helped them with who they should “communicate” with. He reportedly got RMB 200,000 for his service. By PRC corruption standards, this is small potatoes. One can't help but wonder how much the SIEC members were themselves offered once Wang revealed their identities. There are scandals saying that two SIEC members have been arrested following the arrest of Wang for being involved in the case.
" For a small or mid sized company to go public, it usually took about RMB5m in government public relations fee; for a large company, the fee would reach tens of millions." according to a banker who is working with a famous investment bank in China.
to see the chinadaily report, go to http://www.chinadaily.com.cn/english/doc/2004-
to see the xinhua report, go to http://news.xinhuanet.com/english/2004-11/22/content_2244740.htm