THE chairman of China’s securities regulator condemned “barbaric” leveraged company buyouts by some asset managers using illegal funds, according to a statement posted on the China Securities Regulatory Commission (CSRC) website Saturday.

    “You’ve ultimately become a robber in the industry, and that is unacceptable,” CSRC Chairman Liu Shiyu said during his strong-worded speech at a meeting held by the Asset Management Association of China, a self-regulatory body that oversees private funds in the country.

    Liu said China’s capital markets had seen a series of “abnormal phenomena” lately, challenging the bottom line of China’s financial law and regulations.

    “Funneling public funds into leveraged acquisition means ordinary investors will ultimately bear the risks,” he said, underscoring this is absolutely not “financial innovation.”

    Liu’s criticism is seen as partly alluding to recent instances of high profile acquisitions in the A-share market, including a bid by property developer China Evergrande Group to acquire 14.07 percent shares of its peer China Vanke Co. with 36.27 billion yuan (US$5.26 billion).

    In a commentary responding to Liu’s comments Saturday, financial magazine Yicai said the CSRC might have already collected evidence of illegal insurance funds used in some buyout deals via tender offers or banner acquisitions, citing unnamed sources in the industry.

    (SD-Agencies)