(Yicai Global) Dec. 24 -- Xingye Investment may be penalized after the fourth-largest shareholder of Bank of Changsha sold shares in the Chinese lender for less than it said it would, a possible violation of information disclosure regulations.

Between Dec. 14 and Dec. 17, Xingye unloaded 4 million shares in the lender at a price range of CNY7.83 and CNY7.86 (as low as USD1.20), below the issuance price of CNY7.99, the largest regional joint-stock commercial bank in Hunan province said in a statement on Dec. 22. The seller may be fined based on information disclosure requirements stated by China's new Securities Law, effective since last year.

Bank of Changsha's stock price [SHA: 601577] closed 0.4 percent lower at CNY7.84 (USD1.20), remaining mostly below the IPO price since November.

The discount is not in line with the seller's earlier proposal. On Oct. 12, the Hunan province-based Investment manager had said that it will sell no more than 22 million Bank of Changsha shares in the next six months at market prices but not lower than the IPO price. A week after that Xingye had exchanged 14 million shares, or 0.3 percent of the bank's total, for a sum equalling CNY8 apiece through a block transaction.

After the latest transfer, Xinye's stake in the bank dropped to 5.02 percent. The figure had still been almost 5.5 percent or 220 million shares as of September. Nearly 54.1 million units had been pledged then.

This is not China's first case of violations regarding low equity prices. Shanghai-based Ying Yi Investment Center is investigated by the China Securities Regulatory Commission and may be fined from CNY500,000 to CNY5 million (up to USD785,000), along with possible individual fines for executives, after the investor sold CNY2.9 billion (USD455.3 million) worth of shares in biopharma firm Wuxi AppTec at prices below the IPO price. The Shanghai-based medical firm revealed the equity transfer in June.

Founded in August 1999, Xingye has CNY200 million (USD31.4 million) in registered capital, according to corporate information platform Tianyancha. Its controlling shareholder is Xiaoxiang Capital and the actual controller of Xiaoxiang is Liu Hong.

Editor: Emmi Laine, Xiao Yi