(Yicai) Aug. 8 -- The actual controller of Chinese pharmaceutical company Humanwell Healthcare is being investigated by the country’s securities regulator for allegedly failing to disclose essential information as required by law.

Ai Luming is being probed by the China Securities Regulatory Commission, the Wuhan, central Hubei province-based company said yesterday.

The company’s directors and senior management continue to perform their regular duties and the matter will not have a significant impact on the firm’s operations, it added.

This is not the first time for Ai to be censured. In February, Ai was deemed by the Shanghai stock exchange unfit to serve in senior management of a listed company for the next three years for violating information disclosure rules and not observing standardized operations.

Wuhan Dangdai Science and Technology Industries Group, which is the majority shareholder in Humanwell with 27.3 percent equity, borrowed CNY12.9 billion (USD1.8 billion) from Humanwell through third-party agencies from 2019 and 2022. This constitutes non-operating capital occupation by related parties, the bourse said in its deposition letter.

The controlling shareholders of the company, namely Dangdai and Ai, have illegally occupied the company’s funds for a long time without performing any meaningful transactions, seriously infringing on the interests of the company and small and medium-sized investors, it added.

Wuhan held 447 million shares in Humanwell as of July 10, but 86.5 percent of these shares have been pledged and the remaining 13.5 percent have been frozen by the judiciary.

The CSRC also launched a probe against Ai and another company he used to control, tourism firm Wuhan Sante Cableway, yesterday for similar offenses.

In July, the Shenzhen Stock Exchange claimed that Sante Cableway failed to perform its review procedures and information disclosure obligations in a timely manner. At the time, Ai was given a warning about breaking the rules.

Humanwell’s share price [SHA:600079] was trading up 3 percent at CNY22.36 (USD3.10) as of 2.15 p.m. China time today.

Editor: Kim Taylor