More Chinese companies blame trading typos for insider stock sales

An investor watches the electronic board on November 26, 2018 at a stock exchange hall in Nanjing, Jiangsu Province, China.

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BEIJING – Several publicly listed Chinese companies have revealed such examples of what they represent as contingent stock sales over the past few weeks.

For example, a manufacturer of light-emitting diode (LED) products, Shenzhen Changfang, said in a filing that on Friday a shareholder named Nie Xianghong mistakenly sold 16,000 shares by typing in the wrong stock ticker. She said that she was acting as one of the top 10 investors in the company, according to Li Dichu, which owns about 11% and plans to hold about 3% in the company’s shares.

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

The company also revealed in the filing that Lee and some other key investors have not yet completed their share reduction plans. Despite the revelations of a sharp revenue loss from coronovirus shock in export markets of Changfung such as India, the stock price has doubled from Sept 2 to September 7.

This and other trading “errors” by major shareholders came after Chinese shares of mainland reported significant gains this year. The CSI 300 is up over 12% and the Shanghai Composite has risen 7% for the year.

Regulators have moved forward this year with efforts to open up domestic financial markets to foreign institutions, and remove some restrictions on stock listings and trading.

However, analysts generally emphasize that the need for strict punishment for securities fraud requires China’s stock markets to mature.

Other filings from this month suggest that the sale of crashed stock may occur in both small and very well-known companies.

Construction machinery manufacturing giant Sun Heavy Industry revealed on Friday that Mao Zhongwu had sold 96,700 more shares than he said he would reduce his holdings, due to “disturbances” in the transaction process. Mao is one of San’s top 10 shareholders and will be fined 300,000 yuan ($ 43,852) for its illegal sales, according to the company’s investigation.

Jiangsu Letol Electronic, a supplier to LCD TV companies, said in a filing on September 3 that Zhang Daifeng, the former chairman of the company’s board of directors, mistakenly sold 42,000 shares before the expiry of the six-month lockup that followed the expiration. . Of his term in May.

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