(Yicai Global) March 28 -- A southeastern Chinese regional government has run to salvage Chinese game developer Youzu Interactive that is in the throes of a share-pledging crisis. 

Fujian's governmental fund will become Youzu's strategic investor, but the number and price of the latter's equity will be decided later, the Shanghai-based target firm said in a statement yesterday. The partnership will support the company's operation, seek more ways to collaborate, and the buyer promises not to sell its stake to a third party. 

It used to be common practice for Chinese companies to pledge their shares as collateral for loans but once stock prices dropped in 2018, the shareholders risked losing control of their firms. In the second half, China's financial regulators urged local governments to help privately owned share-pledgers to solve the issue bubbling beneath the surface. 

Lin Qi, who is the chief executive and the controlling shareholder of Youzu, has pledged 34 percent of the company's equity, as of earlier this month. The firm changed its accounting provider this month, which prompted the Shenzhen Stock Exchange to inquire what is the reason behind this sudden move.  

Editor: Emmi Laine