China's stock market watchdog has seized control of the nation's fifth-largest brokerage to protect investors as it probes whether the company broke the law.
The China Securities Regulatory Commission took over management Friday of China Southern Securities Co (
In a public notice that appeared in the newspaper yesterday, the commission said China Southern Securities was "doing illegal business" and suffered "disorderly management." It said the brokerage's board of directors, board of supervisors and high-level managers have all been suspended.
Separately, it also said any law violators will be "severely punished," the Daily reported, citing securities newspapers.
While the nature of the illegalities wasn't disclosed, China Southern Securities has been struggling with losses incurred when its investment fund business soured in 2001 due to a downturn in the previously booming Chinese stock markets.
The securities commission said in its notice that the brokerage's customers will still be able to make transactions. The brokerage will now be managed by a team from the commission, the Shenzhen city government, China's central bank and the Ministry of Public Security, it said.
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