(Yicai Global) April 1 -- The Shenzhen Stock Exchange is demanding to know the rationale behind Guangdong Qtone Education's plan to pay CNY1.5 billion (USD224 million) for the firm behind a financial-themed social media account.

The bourse sent an inquiry letter to Qtone asking whether the target, Bajiuling Cultural Innovation, has the required licenses to publish internet news and offer information services, whether its social media accounts conform to regulations, and whether or not the transaction, for a 96 percent stake in Bajiuling, needs approval from authorities.  

Founded in 2014, the Hangzhou-based target is mostly responsible for running the WeChat account of Wu Xiaobo, one of China's best-selling financial writers. The account has over 3 million followers and earns money through advertising, e-commerce, paid knowledge and its community.

Bajiuling also runs the Entrepreneur-Investor Academy and a marketing project named the New Tradesman. Wu, who earned CNY7.5 million (USD1.1 million) from royalties in 2009 to be ranked as China's fifth-richest writer, holds 12.8 percent of the company's stock with his wife Shao Bingbing.

Qtone announced the plan in the middle of last month and suspended share trading on March 15, but did not reveal how much it planned to pay until yesterday. Trading resumed today.

The buyer claims the purchase will add knowledge products and training services in the financial and economic sectors and enrich the company's future in the education industry chain.

The inquiry letter also questioned the sustainability of Bajiuling's business model and operations based on Wu's personal influence, and the value of his intellectual property. It then asked if Qtone was attempting to manipulate its stock price.

Editor: James Boynton