(Yicai) Sept. 18 -- Shareholders of Olo Home Furnishing, a Chinese furniture maker and retailer, have become the latest investors to be heavily fined after China’s securities regulator tightened the rules on stake sales late last month.

The Olo shareholders who are suspected of breaching the recently beefed up regulations will be ordered to pay a total of CNY49.5 million (USD6.8 million), the Nanjing-based company said in a statement recently.

To boost investor confidence and the ailing stock market, the China Securities Regulatory Commission stiffened rules in August to bar major shareholders from offloading stock in poorly performing listed companies. But some investors persist.

Eastern Pioneer Driving School said on Sept. 15 that former Chairman Xu Xiong had been arrested on suspicion of trading violations. Early this month, the Beijing-based company said one of its shareholders had been ordered to make right share sales that the regulator deemed illicit.

In the case of Olo, shareholder Yu Fanyi and persons acting in concert will need to hand over CNY16.5 million worth of illicit gains and pay a total fine of CNY33 million, according to the CSRC’s Jiangsu provincial branch.

On Sept. 5 and 6, Yu and the other persons sold over 22.4 million Olo shares, accounting for more than 7 percent of its shares outstanding. One of them also bought 4,200 shares through centralized bidding on Sept. 6, while paring their holding the same day.

According to the penalty notice, Yu and the others broke the usual rule by which a shareholder cannot conduct further trading in the near term after selling 5 percent of shares in the secondary market.  

The share offloading could have been linked to the recent surge in Olo's stock price. After China introduced new favorable real estate policies on Aug. 25, Olo shares went limit-up for eight consecutive trading days, more than doubling in value.

The company’s shares [SHA: 603326] closed 2.4 percent lower at CNY12.6 (USD1.70) each in Shanghai today, giving Olo a market capitalization of CNY3.98 billion (USD545 million.)

Editor: Emmi Laine