(Yicai Global) Feb. 15 -- China’s securities regulator has banned Wu Gang, the actual controller of Chinese private equity investment and management firm Kunwu Jiuding Investment Holdings, from the securities market for five years.

Wu Gang was banned from the securities market and fined CNY1 million (USD146,340) for illegally intervening in fund operations and using fund assets to help people other than the fund holders to make profits, the Nanchang-based company announced yesterday, citing a ruling from the China Securities Regulatory Commission.

Wu Gang is the actual controller of Jiuding Group, the parent company of Jiuding Investment. Jiutai Fund is a public fund manager owned by Jiuding Group, which has Jiutai Jiuli Fund as its unit. Wu Gang also controls Jiuzhou Securities.

Wu Gang conspired with other individuals by passing Jiutai Fund’s boards and buying shares of Xiamen Savings Environmental via Jiutai Jiuli Fund. Wu Gang and the others took part in the private placements of five listed companies, making a profit of CNY200 million (USD29.2 million), Jiuding Investment noted.

In 2018, Wu Gang illegally instructed Jiutai Fund to conduct liquidation of Jiutai Jiuli Fund to make it convenient for Jiuzhou Securities to get back its investment in Jiutai Jiuli Fund, Jiuding Investment added, noting that Jiutai Jiuli Fund did not disclose the return agreements to its investors and excluded the above CNY200 million from the liquidation.

Wu Gang is Jiuding Investment’s actual controller but assumes no position in the firm, so the CSRC’s punishment against Wu has no direct impact on the business performance and operations of Jiuding Investment and its units, the firm pointed out.

The CSRC also imposed a CNY1 million fine on Jiutai Fund and ordered the company to correct its illegal behaviors. It gave disciplinary warnings and a CNY300,000 (USD43,900) fine to Wu Quang, brother of Wu Gang and chairman of Jiutai Fund, and suspended him from fund businesses for 36 months.

Moreover, the securities watchdog gave disciplinary warnings to Lu Weizhou, general manager of Jiutai Fund, and Wu Zuyao, deputy general manager of Jiutai Fund. Lu was suspended from the fund business for 24 months with a CNY200,000 fine, while Wu Zuyao was suspended for 12 months with a CNY100,000 fine.

Wu Qiang, Lu, and Wu Zuyao are no longer working at Jiutai Fund.

Shares of Jiuding Investment [SHA: 600053] were trading 0.6 percent down at CNY16.05 (USD2.35) as of today’s lunch break.

Editor: Futura Costaglione