Regular inspection not to suppress stocks

An investor looks at an electronic board showing stock information at a brokerage house in Hangzhou, Zhejiang province, Jan 12, 2014. [Asianewspahoto by Long Wei]

BEIJING - Monday's stock plunge was not a result of any intentional administrative suppression, said China's security watchdog Monday.

Deng Ke, spokesman of China Securities Regulatory Commission (CSRC), said last Friday's announcement was just a briefing on regular inspections of brokers.

He said the overwhelming speculation that the CSRC intended to suppress the stock market with negative news is not the truth.

"The inspection has targeted 45 securities companies since December 2014 and the result came out last Friday," Deng explained. "The result showed overall stable operations and controllable risks."

The CSRC announced last Friday that 12 brokerage firms had been punished for violations of margin trading rules after a two-week inspection, which has been see as a lighting the fuse for Monday's plunge. The Shanghai index plummeted 7.7 percent to end at 3,116.35 points, the steepest daily fall since June 2008.

More than 1,900 stocks on China's two bourses fell Monday, with over 160 hitting the daily limit of 10 percent.

The three brokers most severely punished - Citic Securities, Guotai Junan Securities and Haitong Securities - fell by the 10-percent daily limit after they were suspended from handling new clients for three months.