Major shareholders accused of selling stakes under investigation

BEIJING - Major shareholders in five listed companies are under investigation for allegedly selling company shares as China's securities regulator continues efforts to stabilize the country's capital market.

Shandong Yanggu Huatai Chemical Co Ltd, a Shenzhen-listed chemical company, announced Friday that major shareholder Wang Chuanhua received notice of inquiry from the China Securities Regulatory Commission (CSRC) on Friday, accusing him of selling stakes and violating securities regulations.

Wang sold stakes twice, in December and March, with the sales totaling 15.51 million shares, or 5.53 percent of the company's total. The selling violated the rules that a listed company's plan to sell 5 percent or more of its total shares within six months needs to be announced two trading days prior to the first sale.

Currently, Wang holds 44.48 percent of the company's stakes.

The company said the investigation will not have a major impact on its business activity and it will cooperate with the investigation.

Three of the other companies under investigation are listed on the Shenzhen bourse and one is listed on the Shanghai bourse.

To stem the massive sell-off in the stock market, which once lost one third of its value since the June peak, the CSRC banned major shareholders, corporate executives and directors, who hold more than 5 percent of a company's shares, from selling stakes in listed companies for six months, starting July 8.

The CSRC said the measure aims to "maintain stability of the capital market and protect the legal rights and interests of investors" and any disregard of the rule would be "treated seriously".