Original article: [Chinese]

Huaxia Securities, one of China's well-known nationwide stock brokers, went bankrupt on Monday November 17 with debts of RMB 6.6 billion, ending its sixteen-year history.

Beijing Second Intermediate People's Court summoned on Monday the creditors of Huaxia Securities for a bankruptcy conference, marking the broker's official bankruptcy.

The broker needed to repay up to RMB 6.6 billion to its creditors, and its assets including shares and bonds at hand, would be cashed in when appropriate, the court announced at the conference.

Huaxia's non-tradable shares, creditor ownership, and other properties would also be auctioned in public, according to the conference.

Established in 1992 with a registered capital of RMB 2.7 billion, Huaxia Securities has kept its place among China's top three between 1995 and 2005. During its boom time, it owned 91 securities exchange branches and 24 securities service centers across the country.

However, like many Chinese stock brokers, the company began blindly expanding itself after it established itself in its industry.

Then, a series of unfavorable reports surfaced in June 2004 - RMB 1.6 billion was embezzled from clients, there was an RMB 700-million drop in the market value of shares it owned, and RMB 1.79 billion was lost in its investments.

On December 16, 2005, China Securities Regulatory Commission (CSRC), the central securities watchdog, revoked the company's operation permit on the grounds of its poor management, performance and big financial risk.

Last October, a preliminary audit showed that Huaxia's assets and debts totaled some RMB 3.82 billion and nearly RMB 8.99 billion respectively, with a deficit of RMB 5.17 billion. This forced Huaxia to file for bankruptcy on April 30th of this year.

The Huaxia Securities bannerhead on its Beijing headquarters has already been replaced by that of another major stock broker - Citic Construction Securities (CCS), which has also taken over its official website.

According to a former employee at Huaxia, CCS took over the company's  securities exchange branches as early as in late 2005. To repay its debts, Huaxia had sold its first floor reception hall to the Industrial and Commercial Bank of China.

A senior securities professional commented that CCS would try their best to ensure the safety of former Huaxia clients' funds and to retain clients. "Huaxia's bankruptcy would not affect individual stock investors' trading," he said.