(Yicai Global) June 22 -- A Chinese couple who made a tidy profit by buying and selling stocks in Shanghai Kinetic Medical based on a tip-off from an old schoolmate on the medical device maker's board have been fined nearly three times their illicit earnings by the country’s securities regulator.

Yang Bo and his wife Deng Ying were penalized CNY940,000 (USD145,190), the China Securities Regulatory Commission’s Qinghai province branch said on June 18.

Last May, Yang and Ding used family funds to purchase around CNY4 million (USD618,419) worth of stock in Kinetic after learning from Yu Chenglei, an independent director at the company, that Kinetic was in talks with Singapore’s sovereign wealth fund Temasek Holdings and Chinese venture capital firm Hillhouse Capital Group about a CNY1.1 billion (USD167 million) private placement.

After the new share sale was announced, the Shanghai-based pharma company’s stock surged and Yang and Ding cashed in, earning around CNY340,000 between May 13 and May 21.

Yu, who talked with Yang 157 times in the two months before the private placement went public, was not penalized. He stepped down as independent director of Kinetic this month, a position he had held for six years.

The private placement, however, did not go ahead. Temasek and Hillhouse pulled out in November last year due to changes in the market environment and other concerns, Kinetic said at the time.

Kinetic’s stock price [SHE: 300326] closed up 4.41 percent at CNY13.49 (USD2.10) today.

Editor: Kim Taylor