(Yicai Global) May 23 -- Shanghai's stock exchange has prohibited the actual controller of Pang Da Automobile Trade, China's largest car dealer, to work as an executive in a listed company for three years because of hiding information from the bourse. 

Pang Da didn't tell the SSE that the firm was under a criminal investigation regarding insider trading, and it changed its equity structure without informing the bourse, which has caused a severe breach of rules as well as harmed investors' rights, the SSE said in a statement on May 21. 

Baotou Xindamin Business Planning, the former second-largest shareholder of Pang Da, sold 5 percent of the Tangshan-based firm's shares in 2015. However, what the SSE found out was that more than 70 percent of that went to an affiliate, owned by Pang Da's actual controller.

In fact, a total of CNY1.2 billion (USD176.2 million) worth of capital flows, equalling 10 percent of the firm's net assets in 2014, was shifted between Pang Da and its affiliates in the three months ended May 2015. These transactions were not reviewed with the company's board of directors nor its general meeting of shareholders, and thus not reported to the bourse, the SSE said. 

The police investigated Pang Da in 2016 due to a suspicion of insider trading, which the company did not share with the SSE. 

Pang Da's stock price [SHA: 601258] has declined 1.6 percent to CNY1.2 (17 US cents) today. 

Editor: Emmi Laine