Chinese train manufacturers China CNR and CSR Corporation have refuted allegations that senior executives traded on inside information ahead of the two firms’ merger announcement.
The state backed companies said that trading was based on publicly available information and employees’ knowledge of the securities market.
Chinese media had earlier questioned why so many senior executives, and in some cases, their spouses and children, had traded the two firms’ stocks in the six months prior to an October 27 trading halt, called because of the planned merger announcement.
Senior executives working on the merger “strictly complied with relevant confidentiality requirements and did not inform their immediate family members of the information relating to the merger,” China CNR wrote in a stock exchange filing.
The companies said that they had spoken with the regulator, the China Securities Depository and Clearing Company, about the trades and questioned the executives.
Shares in the firms, whose merger is expected to create a company with a combined annual revenue of about 200 billion yuan (HK$ 250 billion), both rose sharply in Hong Kong and Shanghai, after the merger was announced.