(Yicai Global) April 25 -- Shares of Newcapec Electronics plunged by the exchange-imposed saily trading limit after the chairman of the Chinese provider of smart card systems software was criminally detained on suspicion of leaking inside information.

Newcapec Electronics [SHE: 300248] closed down 20 percent at CNY9.54 (USD1.38) a share today.

The household of Yang Weiguo, who is also Newcapec's actual controller, notified the firm that Yang had been detained, the Henan province-based company said yesterday. Newcapec has not received any investigation or cooperation documents from the authorities, and it has made proper arrangements for relevant matters, it added.

Newcapec is operating normally, and its management will strengthen operations and control, it noted. The board of directors has elected Li Yuling to perform the duties of chairperson and legally represent the company, it added without disclosing further details.

The Shanxi office of the China Securities Regulatory Commission issued an administrative penalty decision in Jan. 5, 2021, which may be related to the case. Although it did not directly name Yang Weiguo in the penalty letter, it details a person surnamed Yang, who was also the chair of Newcapec.

On Aug. 10, 2018, Yang led a team to Hangzhou to meet with the vice president of Ant Group and the president of Alipay, surnamed Ni, mainly to discuss business cooperation and an investment tie-up, according to the letter.

Eight Newcapec shareholders, including Yang, planned to transfer nearly 6.3 percent of the firm's shares to Ant Group unit Shanghai Yunxin Venture Capital Management, it said in January 2019. 

Shanghai Yunxin intended to invest CNY250 million (USD36.2 million) to increase the capital of Perfect Digital Union Beijing Technology, a subsidiary of Newcapec, in which it held an 86 percent stake. After the capital increase, Newcapec would have owned 60 percent of the unit, Shanghai Yunxin 30 percent, and Tianwei Hengrui the rest, it noted at the time.

Between Oct. 8 and Dec. 28, 2018, Yang's former classmates Li Hui and Ma Minghai bought CNY1.9 million (USD270,000) and CNY62.5 million (USD9 million) of Newcapec's stock respectively. Previously, they had a small percentage of the firm's shares.

The insider trading information of the two was highly consistent, and some CNY21.6 million of their investment was confiscated, according to the CSRC’s Shanxi office. They were fined CNY43.2 million, it added.

Editor: Martin Kadiev