(Yicai Global) Dec. 15 -- Shares of Merit Interactive plunged by the exchange-imposed daily limit of 20 percent today on the news that a senior employee has embezzled CNY66 million (USD10 million) from the Chinese data service provider over the past two years.

Hangzhou-based Merit’s stock price [SHE:300766] closed at CNY20 (USD3), giving it a market capitalization of CNY8 billion (USD1.2 billion).

During its latest audit, Merit found that a senior director surnamed Li had inflated sales figures by as much as CNY37.5 million (USD5.7 million) in 2019 and CNY28.6 million in the first nine months of this year. He was able to do this by forging the corporate seals of clients, posing as customers’ staff and falsely confirming statements of account, the company said.

The director's actions have cost Merit CNY19.7 million (USD3 million) in direct costs, expenses and tax expenditure. However, the incident has had no impact on the company's operations, it added.

The employee has been suspended and the matter reported to the police. The case is still under investigation, Merit said.

It has not been a good year for Merit, which provides analytic and user profiling services to mobile app developers. It logged a 25.3 percent drop in net profit in the first three quarters from the same period last year to CNY99 million (USD15 million), according to its latest earnings report. Revenue was up 2.4 percent to CNY376 million.

Editor: Kim Taylor