Chinese brokerage Citic Securities Co. said Wednesday it overstated certain financial transactions during a market meltdown this past summer.
The revelation is the latest setback for the giant firm which has come under intense government scrutiny, the Wall Street Journal reports.
In an e-mailed statement to the media, Citic Securities cited upgrades to its computer system as the reason for the incorrect reporting, mostly related to its over-the-counter swaps business, between April and September.
A day earlier, the quasi-regulatory Securities Association of China said it discovered a “massive error” last month in regulatory filings by Citic Securities related to its swaps business..
Based on numbers provided by Citic Securities and the association, the reported figures were 26 times higher than the actual transactions.
The company reported doing swap deals of 1.06 trillion yuan (US$166.4 billion) between April and September when the true figure was closer to 40 billion yuan.
The association, which is tied to the China Securities Regulatory Commission, said a result of the mistake was to overstate the size of China’s total equity swaps transactions where Citic Securities is by far the largest player.
Regulators and police have previously said they are looking for signs of irregularities throughout the securities industry.
But a string of official and corporate announcements suggest that Citic Securities has been the most deeply affected, with several of its top managers under investigation. The firm’s general manager is among several of its executives who have been detained and its longtime chairman said last week he would leave the firm.
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