More Chinese companies blame trade typos for insider share sales

0
61


An investor looks at the electronic card at a trading floor on November 26, 2018 in Nanjing, Jiangsu Province, China.VCG via Getty Images

BEIJING – A sign of how murky China’s stock markets may still be, some publicly traded companies have revealed strange cases of “accidental” share sales in recent weeks.For example, Shenzhen Changfang, a maker of light-emitting diode (LED) products, said in a filing on Friday that a shareholder named Nie Xianghong accidentally sold 16,000 shares by typing the wrong ticker. She was acting in accordance with Li Dichu, one of the top 10 investors in the company, who owns around 11% of the capital and had planned to reduce its holdings by around 3% of the company’s shares, according to the filing.

In a response released to the Shenzhen Stock Exchange letter of concern on Monday, the company said there had been no insider trading or market manipulation.

The company also revealed in documents that Li and a few other large investors have yet to complete their stock reduction plans. The share price more than doubled from September 2 to September 7 despite the disclosure of large revenue losses due to the coronavirus shock in Changfang’s export markets such as India.

This and other major shareholders’ trading “mistakes” come after mainland Chinese stocks posted big gains this year. The CSI 300 is up over 12% and the Shanghai composite is up 7% for the year so far.

Regulators also continued their efforts this year to further open up domestic financial markets to foreign institutions and remove some restrictions on stock listing and trading.

However, analysts generally point out that a stricter sanction for stock fraud is needed for Chinese stock markets to mature.

Other filings this month reveal that accidental share sales can occur at smaller, high profile companies.

Sany Heavy Industry, a construction machinery manufacturing giant, revealed on Friday that due to a “bad deal” in the transaction process, Mao Zhongwu sold 96,700 more shares than he announced. that he would reduce his holdings. Mao is one of Sany’s top 10 shareholders and will be fined 300,000 yuan ($ 43,852) for his illegal sales, according to documents filed by the company.

Jiangsu Lettall Electronic, a supplier to LCD TV companies, said in a September 3 filing that Zhang Defeng, the former chairman of the company’s supervisory board, mistakenly sold 42,000 shares before the expiration of the six-month blocking following expiration. of his term in May.

On September 1, TCL Technology said in a filing that shareholder Li Dongsheng also typed the wrong ticker and sold 5 million shares by mistake.

LEAVE A REPLY

Please enter your comment!
Please enter your name here