(Yicai) July 31 -- Shares of LBX Pharmacy Joint Stock, China’s third-largest listed drugstore operator by revenue last year, tumbled after disciplinary inspection and supervision authorities detained its chairman and actual controller for investigation.

After plunging by its 10 percent daily trading limit in the morning session, LBX Pharmacy [SHA: 603883] ended down 5.1 percent at CNY13.89 (USD1.92) a share in Shanghai today.

The Hunan Provincial Supervisory Committee of the Communist Party of China detained Xie Zilong on July 28 for a matter unrelated to LBX Pharmacy, the Changsha-based company announced yesterday. It has not yet received any notification from the authorities nor has it been asked to assist in the investigation, the firm added.

Detention is a compulsory measure taken by disciplinary inspection and supervision authorities during probes of serious job-related violations and crimes, such as embezzlement, bribery, and dereliction of duty, Deng Xinhui, a lawyer at W&H Law Firm, told Yicai.

It aims to ensure the smooth progress of the investigation and prevent the person under investigation from interfering with or obstructing related work, Deng added.

In this regard, industry insiders believe that capital market regulation is strict at present, with a "zero tolerance" attitude becoming increasingly evident. Violations such as information disclosure non-compliance, insider trading, and market manipulation will all be severely punished.

Many executives from listed Chinese companies have been detained in recent years. According to incomplete statistics, 38 directors, supervisors, and senior executives from 34 publicly traded firms have been detained so far this year, exceeding last year’s total.

LBX Pharmacy’s net profit jumped 18 percent to CNY930 million (USD130 million) last year on an 11 percent gain in revenue to CNY22.4 billion (USD3.1 billion). As of the end of last year, it had 13,600 stores, 9,180 of which were self-operated, across 18 provincial-level regions.

Editor: Futura Costaglione