(Yicai) Oct. 11 -- Shares in Orient Securities plunged as much as 8.7 percent today even after the Chinese brokerage asserted that the departure of several senior executives over the weekend is a routine change and is not connected to an ongoing investigation into the initial public offering of a company it is underwriting.

Orient Securities’ share price [SHA: 600958] was trading down 6.7 percent at CNY8.74 (USD1.20) as of 1 p.m. China time today. Earlier in the day it sank to CNY8.55.

The resignations of four directors on Oct. 9 is a normal adjustment, Orient Securities said yesterday. One of the directors, Song Xuefeng, had worked for the Shanghai-based firm for 12 years, rising to the level of executive director and director of the company’s strategic development committee in March 2021. Song resigned as he is changing job, the firm added.

The same day Chief Economist Shao Yu also said on WeChat that he had left his post. Shao stepped down due to a shift in plans for his professional development, Orient Securities said.

These personnel changes gave rise to market speculation that the departures have to do with a probe into air conditioner manufacturer Zhejiang Kingair which is attempting to relist on the Shanghai stock exchange after being kicked off in April 2009 for running at a loss for two consecutive years.

The Shanghai bourse is investigating Shaoxing, eastern Zhejiang province-based Kingair, formerly known as Guoxiang Refrigeration, due to issues concerning the second attempt at listing similar assets at a high price, it said.

Kingair’s listing has been suspended, and Orient Securities has not been paid its 7.74 percent underwriting fee, the brokerage said in a separate announcement yesterday.

Orient Securities is an indirect stakeholder in Kingair. The brokerage holds 11.1 percent equity in an investment firm called Haining Dongzheng Hande Investment Partnership which owns 2.7 percent of Kingair.

Despite the challenges, Orient Securities is performing well. Net profit tripled in the first half to CNY1.9 billion (USD261.3 million) while revenue jumped 19 percent to CNY8.7 billion (USD1.2 billion). But its total assets dipped 2.1 percent to CNY360.1 billion (USD49.4 billion).

In the first six months, Orient Securities underwrote two IPOs out of the 173 companies that went public on the mainland, at a value of CNY2.9 billion (USD397.7 million). It also assisted six companies to pass the listing examination, including three IPOs and three convertible bonds, over the period.

Editor: Kim Taylor