Founder Group top execs probed over insider trading allegations
Print Edition
TOP executives of Founder Group, owned by Peking University, were questioned by Chinese regulators after they were accused of insider trading and misappropriating company assets of “several dozen of billion yuan.”
Founder’s executives were also involved in the case of Ling Jihua, a former vice chairman of China’s top political advisory body, who was being investigated on allegations of corruption and discipline violations, media reported yesterday.
Founder Group Chairman Wei Xin, Chief Executive Li You and President Yu Li were “assisting authorities’ investigation.”
Peking University has appointed new executives in their place temporarily, Founder’s listed subsidiaries Founder Securities Co and China Hi-Tech said in statements to the Shanghai Stock Exchange. But they didn’t provide specific details of the probe.
Founder had sponsored Ling and his family to buy real estate in Japan and a Ferrari for Ling’s son, media reported.
Ling, former vice chairman of the Chinese People’s Political Consultative Conference National Committee, is being investigated for “suspected serious discipline violations” under President Xi Jinping’s battle to root out graft.
Founder, set up by Peking University in 1986, has six listed subsidiaries involved in information technology, medical, real estate, finance and trade.
The Founder executives were also alleged to use insider information to profit from trading shares of listed subsidiary firms and transferring an estimated more than 350 million yuan (US$56 million) profit to a firm invested by their family members, said Beijing Zenith Holdings Co, Founder Securities’ second-largest shareholder.
Seventeen of Founder’s bank accounts containing 1.8 billion yuan were frozen in December through a court order.
Zenith also accused Li and other executives of illegally transferring company assets at unreasonably low prices to firms owned by family members. Li and his wife had an unaccountable 4.5 billion yuan in bank deposits, media reported.
Founder denied the “malicious rumors.”
Industry insiders said Founder and Zenith fought for control of Founder Securities, China’s seventh-largest brokerage by market capitalization of over US$13 billion.
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