A PROBE found evidence that CITIC Securities Co., the nation’s biggest brokerage, engaged in insider trading connected to the government’s rescue of the stock market, Reuters quoted people familiar with the matter as saying.

    A preliminary investigation concluded that the brokerage used advance knowledge of government-orchestrated stock purchases to execute trades that benefited the firm, said the people, who asked not to be identified because the matter is private.

    A CITIC spokeswoman said the company hasn’t received any formal notification regarding the nature of the investigation. The China State Regulatory Commission didn’t immediately respond to a request for comment.

    CITIC Securities is one of the brokerages that was drafted in to government-led rescue efforts which have included 1.5 trillion yuan (US$235 billion) of stock purchases since June, according to a Sept. 7 estimate by Goldman Sachs Group Inc.

    Emergency measures unleashed to counter the nation’s stock bust have also involved a widening enforcement crackdown, with officials targeting so-called “malicious short-sellers” and vowing to “purify” the market.

    Seven CITIC Securities executives, including President Cheng Boming, are under investigation for offenses including alleged insider trading, according to domestic media reports. No comment has been available from those individuals.

    CITIC Securities is part of CITIC Group, the nation’s first State-owned investment corporation, which was set up in 1979 as part of the late leader Deng Xiaoping’s push to modernize the country.

    President Xi Jinping, has sought to reassure global concern about the world’s second-largest economy, defending his government’s actions in the stock market and saying growth will be maintained.

    “China’s economy will stay on a steady course with fairly fast growth. It’s still operating in a proper range with a growth rate of 7 percent. Our economy is under pressure but that is part of the path on the way toward growth,” the Chinese president said in a speech in Seattle on Tuesday, the first day of his state visit to the United States.

    The president defended his government’s intervention into the country’s stock market saying the recent abnormal ups and downs in the market had now reached “a phase of self-recovery.”(SD-Agencies)