Chinese IT execs detained over alleged bribes
Summary: Two senior executives from China’s top futures exchanges have been detained after they allegedly received bribes from vendors supplying equipment for their companies’ transaction systems.
Senior IT executives from two large futures exchanges in China have been detained for allegedly taking bribes from suppliers for their companies’ transaction systems.
Yan Shaohui, who is in his 40s, and Zhang Guoyan, 38, were arrested and questioned by prosecutors, although it is not yet clear if they will be charged, Chinese financial news site Caixin Online reported Wednesday.
According to the report, Yan is the chief engineer of the electronic exchange system at Shanghai Futures Exchange (SHFE). Zhang, on the other hand, is the director of China Financial Futures Exchange’s (CFFEX) technology center, which he joined in 2006. The amount of bribes the two are accused of taking was not stated.
The report cited several sources familiar with the matter as saying investigations into the two men were likely connected, as the two companies often shared technology and talent.
The sources added the bribes Yan and Zhang took were likely from suppliers for the exchanges’ transaction systems. A large amount of capital is spent annually on updating the systems to meet demand of new products and trading techniques, so executives in charge of the systems’ design and operations hold significant sway over suppliers, they said.
Last year, an anonymous online message accused a former SHFE executive of illegally making billions of yuan by taking advantage of the loopholes he created in the exchange’s transaction system. But when SHFE examined the system, it found no such loopholes, the Caixin Online report noted.
Prosecutors said the investigations into Yan and Zhang are not related to the design of the transactions.
CFFEX and SFHE are the two largest futures exchanges in China in terms of transaction value. According to data from China Futures Association, CFFEX was placed first in 2012 with a turnover of 75.8 trillion yuan (US$12.1 trillion), followed by SHFE with 44.6 trillion yuan (US$7.1 trillion).