China Officials Jailed as Government Cracks Down on Leaks of State Secrets
By Bloomberg News - Oct 24, 2011 11:02 AM GMT+0800
China sentenced two officials to jail for leaking secret economic data, state prosecutors said, as the government aims to crack down on selective disclosure in the world’s third-biggest market for equities.
Wu Chaoming, a researcher with the Finance Institute at the People’s Bank of China, was sentenced to six years in jail for intentionally revealing secret data to the securities industry, Li Zhongcheng, a state prosecutor, said in a statement. Sun Zhen, a former secretary to a deputy director in the National Bureau of Statistics, was sentenced to five years in jail for disclosing state secrets.
Indictments have also been filed in the cases of four suspects employed in the securities industry, according to Li. The government is seeking to reduce leaks of economic data such as inflation and gross domestic product figures that have given an unfair edge to some in the securities industry.
“The improvement is evident,” said Lu Ting, a Hong Kong- based economist at Bank of America Corp. unit Merrill Lynch. “It’s been very different in the past few months. There has been no leak. What circulated in the market turned out to be nothing more than rumor.”
Between June 2009 and January 2011, Sun violated provisions of the law on Guarding State Secrets by leaking 27 items of classified statistical data to employees of the securities industry, Li said. Wu leaked 25 items of classified statistical data 224 times to 15 people in the securities industry, Li said.
“There are still weak links that need to be strengthened” in terms of restricting how widely data is distributed and designating levels of secrecy, said Du Yongsheng, spokesman for the National Administration for Protection of State Secrets.
The severity of the sentence is a surprise, said Frances Cheung, a Hong Kong-based strategist at the Credit Agricole CIB.
“I think they did the right thing in order to maintain credibility, especially when you relate that to how Chinese data nowadays are market-moving and influential,” she said.
Leaks give certain mkt traders an advantage; as China's data, gains gravitas and becomes closely watched, globally.
Selective disclosure whether by time or by geography or by certain influential groups should be discouraged if the data is to have importance and credibility.
Timeliness is of the essence.