Caixin
Mar 13, 2013 06:13 PM

IT Executives at Top Futures Exchanges Held over Bribe Allegations

(Beijing) – Two senior executives responsible for the information technology systems at two large futures exchange have been detained over suspicions they took bribes.

Yan Shaohui, who is in his 40s, joined Shanghai Futures Exchange (SHFE) in 1994 and worked his way up to the chief engineer of the exchange's electronic exchange system.

Zhang Guoyuan, 38, has been with China Financial Futures Exchange (CFFEX) since it was founded in 2006. He was the director of its technology center when arrested.

Both are being questioned by prosecutors for allegedly accepting bribes. It was unclear whether they would be charged.

Several sources familiar with the situation said the two exchanges often share technology and talents and the investigations into the two men were likely connected. They also suspect that the bribes to Yan and Zhang might have come from suppliers for the exchanges' transaction systems.

Each year a great amount of capital is spent on updating the systems so they can meet the demand of new products and evolving trading techniques, experts say. That provides the executives in charge of designing and running the systems significant sway over supplying companies, the experts say.

Last year, an anonymous message surfaced online that accused a former SHFE executive of illegally making hundreds of millions of yuan by taking advantage of loopholes he created in the exchange's transaction system.

Several sources with knowledge of the matter said SHFE examined its transaction system but found no such loopholes. Prosecutors have said the investigations into Yan and Zhang do not concern the design of the transaction systems.

The two exchanges are the largest in the country in terms of total transaction value. Data from trade group China Futures Association shows that CFFEX ranked the first last year with a turnover of 75.8 trillion yuan, and SHFE came in second with 44.6 trillion yuan.

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