(Yicai Global) Sept. 3 -- Baofeng Group's legal representative Feng Xin is officially under arrest, charged with bribery of a non-government official and misappropriation of funds.

The prosecutor's office in Shanghai's Jing'an district recently issued the formal arrest warrant, it tersely announced yesterday on its official account on China's popular WeChat messaging app.

Feng's ongoing legal woes arise from his alleged bribery in the fund-raising for a project jointly initiated by Baofeng Group and Everbright Capital Investment in 2016 to acquire London-based sports event copyright company MP & Silva Holdings, people familiar with the matter told Yicai Global.

Feng, who is the founder of the Baofeng video live-streaming platform, directly holds 21.34 percent of its shares, and indirectly owns a further 4.45 percent and is thus the firm's actual controller, board chairman and general manager.

Police took compulsory measures against Feng on suspicion of criminal acts, Beijing-based Baofeng Group announced on July 28. Compulsory measures under Chinese law comprise bail, house arrest, temporary detention and remand. Only the People's Procuratorate -- the public prosecutor -- has the authority to order the formal arrest of a criminal suspect under Chinese law.

The company's shares [SHE:300431] hit the limit down for two straight days after news of the compulsory measures against Feng came to light on July 28. They closed at CNY5.03 (USD0.70) yesterday, over 20 percent lower than their July 26 market close of CNY6.30.

Everbright Securities' former Chief Risk Officer Wang Yong, who was also implicated in the scandal, stepped down early last month, citing career development reasons, after the detention of Feng, who was his internet video firm's partner.

Baofeng Group recorded a net loss of CNY264 million in first half, it said in an Aug. 29 statement. The Shenzhen Stock Exchange may suspend the trading of its shares if its audited financial report for 2019 shows net assets below zero as of the end of this year.

Baofeng Group's stocks opened 0.99 percent higher at CNY5.06 today.

Editor: Ben Armour