TRAINMAKERS China CNR and CSR Corp. yesterday said share deals made by senior executives ahead of a merger announcement was not insider trading as these executives did not have prior knowledge of the reorganization.

    The firms, which announced they would merge Dec. 31 after an over two-month-long trading suspension, said in regulatory filings yesterday that they were responding to local media reports alleging insider trading.

    China CNR said senior management of both firms, including China CNR’s president and chairman and their relatives, conducted share deals in the six months before trading was suspended Oct. 27.

    “The trading of shares by such relevant parties was carried out based on their judgment on the securities market,” CSR Corp. added in its statement. “This is merely individual investment and has no connection with the reorganization.”

    The companies said that they had checked with the regulator, China Securities Depository and Clearing Corp., about the trades and obtained explanations from the executives.

    Shares in the firms, whose merger is expected to create a company with a combined annual revenue of about 200 billion yuan (US$32.27 billion), hit their 10 percent maximum daily trading limit for six consecutive trading days after they resumed trading Dec. 31.

    China built the world’s longest high-speed train network in less than a decade and has expressed its desire to export its technology. The two firms, however, have fiercely competed against each other while trying to sell trains abroad.

    (SD-Agencies)