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Suspicions of securities scandals stand out in Chinese market

Foreign investors on the rise but face potential risk amid insufficient oversight

Suspicions of insider trading surfaced in the stock market over the sale of Huawei's low-priced smartphone brand.   © Reuters

SHANGHAI -- In October 2020, a lawyer in Shanghai was tipped off to Huawei Technologies' plan to sell budget-brand smartphone unit Honor to handset distributor Digital China Group. The 40-something lawyer says a senior Digital China executive put a word or two into his ear about the plan.

Digital China Chairman and CEO Guo Wei was embroiled in an insider trading case when he divulged information about another acquisition to a friend in 2019. Guo was a high-ranking Communist Party member. Some people on the Internet suspected that Huawei's plan also might be leaked before it was announced.

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