Fund to compensate investors set up

CSC Financial (6066) says it will jointly set up a special fund worth 1 billion yuan (HK$1.14 billion) to compensate investors of Amethystum Storage Technology, as the Chinese securities regulator is investigating the brokerage over the IPO accounting fraud of the Chinese optical storage firm.

As one of the largest brokerages in China, CSC Financial served as the sponsor and lead underwriter of Amethystum Storage, which has been forced to delist from the Star board of the Shanghai Stock Exchange after finding fraud in their IPO documents, said the China Securities Regulatory Commission. The watchdog is investigating CSC Financial and other entities involved in the IPO.

The brokerage said the amount of the fund is a preliminary estimate, which may be adjusted according to the final calculation of the amount of compensation.

Meanwhile, CSC Financial saw its net profit in the first quarter jump nearly 58 percent to 2.43 billion yuan from a year ago. Its operating revenue reached 6.7 billion yuan, rising by about 6 percent over the first quarter of last year, while the operating profit surged 50 percent to 3 billion yuan. Its total assets increased about 3 percent year-on-year to 525 billion yuan at the end of the last quarter.