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China Everbright Securities president resigns

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SHANGHAI, Aug. 22 (Xinhua) -- China Everbright Securities (CES) said on Thursday that the company's director and president Xu Haoming has resigned.

Yuan Changqing, board chairman of the company, will replace Xu as the temporary president, the company said in a statement to the Shanghai Stock Exchange Thursday morning.

Trading of CES shares would be suspended from 1:00 p.m. Thursday and would resume on Friday, the statement added.

Flaws in CES's strategy trading system resulted in the placement of a huge number of buy orders at market prices last Friday. CES suffered an overall loss of 196 million yuan during trading on Aug. 16.

The erroneous trade caused a swift rise in domestic A-share stocks, and the benchmark Shanghai Composite Index spiked 5.96 percent within three minutes on Aug. 16.

The stock price of CES continued to fall on Thursday morning after plunging more than 15 percent on Tuesday and Wednesday.

The firm has been suspended from performing as a major underwriter of debt financing instruments for non-financial companies, according to a separate CES statement on Thursday.

Analysts said the securities firm faced being downgraded in next year's broker classification. According to China's regulation, a downgrading may lead to a significant increase of required funds for investor protection.

A number of civil lawsuits are expected to come with investors' mounting criticism over the company's "insider trading."

While Song Yixin, a lawyer, said it is hard to identify those who suffer losses from the firm's abnormal transactions as well as the scale of losses and responsibilities.

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