CRI听力:Rail Merger Threatened by Insider Trading Allegations

Shares of Chinese train makers CSR and CNR rebounded on Tuesday, after dipping during several consecutive days of trading amid claims of the two companies being involved in insider trading before the announcement of a merger.

At market close on Tuesday, CSR shares jumped 3.8 percent while CNR shares surged 4.2 percent.

The recent slide follows allegations in the media that more than 20 executives of the two companies and their relatives have traded shares during the six-month period prior to a trading suspension last October.

The two companies have both issued statements denying the insider trading accusations, saying the trading involved investments made by individuals and therefore doesn't qualify as insider trading.

However, the final announcement of the merger plan, which took place two weeks ago, has sent the two companies' shares soaring over 30 percent, generating huge profits for those who had bought before the suspension.

It is not yet clear whether the securities regulator will launch an investigation into the matter.

For more on this, we are now joined live by Benjamin Cavender, Principal at China Market Research.