(Yicai Global) June 21 -- Days after major shareholders dumped holdings in formerly US-listed Focus Media Information Technology Co. [SHE:002027] and caused its share price to plummet, shareholders in Baofeng Group Co. [SHE:300431] have made a similar selloff, fueling suspicion about the return of China concept stocks to the nation's stock market.

Market insiders believe Chinese regulators have also grown wary of approving share offerings from companies previously listed abroad. They believe regulators should encourage these stocks to float on both A-share and foreign markets, to ensure they are still subject to regulation in mature markets.

Focus Media announced on June 16 that two of its largest shareholders would sell their combined total of nearly 1.24 billion shares in the company over the next six months, beginning on the fourth trading day after the statement. The pair had invested some CNY11.8 billion (USD1.73 billion) in the firm, and first quarter reports show they had already sold 159 million shares between them before the announcement.

The company closed at CNY13.27 (USD1.94) yesterday, meaning the two will combine to make more than CNY16 billion in share sales, profiting more than CNY4 billion plus profits from their past sales.

Baofeng Group also had plans to float in the US before opting to go public on the Chinese Growth Enterprise Market on March 24, 2015. Its two largest shareholders from the initial offering disclosed plans to sell off their entire holdings just before the end of the lock-up period.

"Some China concepts stocks return to the Chinese market to increase share premiums and find arbitrage opportunities," said Dong Dengxin, president of Wuhan University of Science and Technology's Institute of Finance and Securities. "It's short-sighted," he added, saying major shareholders ditching stock from returning companies is becoming predictable.

Labeled a phantom stock due to a suspected scam listing, Baofeng has posted steep losses in earnings. Its earnings per share were CNY0.7 (USD0.1) when it listed on the A-share market, said Dong, but it dived to CNY0.2 last year and to a negative number this year.