Rail merger threatened by insider trading allegations

Claims of alleged insider trading by senior executives of two State-owned railway vehicle manufacturers planning to merge have caused shares in the companies to fall and cast a shadow on the deal, which is expected to create the world's largest train manufacturer by sales.

Media reports have suggested that more than 20 executives of the two companies - CNR Corp Ltd and CSR Corp Ltd - and their relatives have been found to have bought and sold stocks in each company during the six-month period prior to their trading suspension in October last year before the announcement of the merging plan.

Some legal experts said the merger may be halted if the allegations are proved to be true and prompt regulators to launch an investigation into the matter.