(Yicai Global) Aug. 12 -- Wang Lijun, ex-president and actual controller of private zipper maker Fujian SBS Zipper Science and Technology, has been arrested by police on suspicion of insider trading, the firm said yesterday in a statement.

Wang quit on Aug. 5 and has held no position in SBS since then. The Jinjiang, Fujian province-based firm has appointed 37-year-old director Du Huijuan as its acting president and legal representative. The firm has thus far not offered any specific details as to Wang's alleged crime.
SBS Shares [SHE:002098] were 7.34 percent lower in morning trading at CNY5.31 (USD0.75).

Wang became SBS's largest shareholder and actual controller when he spent CNY2.5 billion (USD354 million) in 2016 to take a 25-percent stake.

After wresting control of SBS, he spent another CNY1 billion to grab a 65 percent share of cross-border e-commerce firm ValueLink in 2017 and planned to sell most assets and debts related to SBS's zipper business to its ex-largest shareholder Fujian SBS Group the same year to focus on the cross-border e-commerce business.

This restructuring failed in September, however. One month later, SBS received a notice from the China Securities Regulatory Commission that the firm was under investigation for suspected violations of information disclosure requirements. This  probe is still underway.

Formed in 1992, SBS is one of China's brand name zipper makers. It runs five plants in the cities of Shanghai, Tianjin, Dongguan and Chengdu and in Fujian province.

The company took in CNY2.3 billion in operating income last year, up 22.2 percent annually, the firm's financial data show. It lost CNY650 million (USD92 million) in net profits, with its losses from ValueLink going as high as CNY74.8 million. It also booked CNY748 million in accrued goodwill impairments. Goodwill is an intangible asset tested for impairment annually for book-keeping purposes.

Editor: Ben Armour