Insider trading by national train makers investigated

Shanghai Exchange investigates insider trading accusations among train makers

Shanghai Stock Exchange is holding an investigation into the insider trading accusations made about executives of China's two State-owned train makers, a securities watchdog announced on Friday.

The authority will investigate according to the law, said a spokesman of China Securities Regulatory Commission in a weekly press conference.

More than 20 senior executives of CNR Corp and CSR Corp and their relativeswere allegedly involved in trading stocks in each company before the announcement of the merger, according to media reports.

The two firms denied such allegations in an announcement on Tuesday, stating that the trading by relevant parties was merely individual investment and “had no connection with the reorganization.”

The CNR said in a filing that the management involved had dealt in the CSR shares before they were informed of the merger proposal and their trades were based on public information and their own analysis of the investment value of the shares.

The CSR issued a similar announcement at the same time.

The two companies suspended their stocks from trading from October, and announced their merger by the end of last year.

According to the plan, CSR will issue shares to CNR's shareholders to complete the merger. Both the companies soared past the daily limit of 10 percent on Dec 31 when trading resumed.