Funds News
- Shanghai News
Date: 21-Jun-2007 Sources: (Shenzhen Daily)
PUBLIC funds are being embezzled on a vast scale and pumped into the Shanghai stock market, threatening the stability of the high-flying bourse, the China Daily newspaper reported yesterday.
It quoted the Shanghai High People's Court as saying 6.32 billion yuan (US$831.58 million) of the city's public funds were misappropriated between 2003 and 2006 in 105 separate cases.
Most of the money ended up in the stock market. Public institutions are allowed only to invest in safe instruments such as government bonds. But they flouted the law by selling bonds and ploughing the proceeds into shares, the paper quoted Qi Qi, a deputy director of the court, as saying.
'The embezzlement is a result of improper supervision of public funds. This is becoming a major threat to the stability of the stock market and to funds,'the English-language daily quoted the court as saying.
Qi said the court was conducting a survey with the Shanghai Stock Exchange on the risks currently threatening the stability of the market, which has gained almost 60 percent this year on top of a 130 percent surge in 2006.
'There has not been any effective mechanism in the country to supervise the operation and management of public funds, and, as a matter of fact, it is difficult to curb their malpractices,'Qi was quoted as saying.
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