(Yicai) Aug. 19 -- Shares of Vantone Neo Development Group dropped after the Chinese property developer said Chairman Wang Yihui has been detained by the police.

Vantone [SHA: 600246] closed 7.6 percent lower at CNY8.85 (USD1.23) in Shanghai today. The shares has been volatile recently, surging more than 50 percent earlier this month after the firm revealed plans to take over chipmaker Sudo Information Technology. They peaked at CNY11.94 during intraday trading on Aug. 15.

Wang, who is also Vantone’s controlling shareholder with a 25.7 percent stake, is cooperating with the police in an investigation unrelated to the builder’s daily operations, the Beijing-based firm announced yesterday. His detention will not have a majorly adverse impact on daily business activities, it said.

The chairman’s duties are being performed by Chief Executive Officer Qian Jinzhou for the time being, the company said, adding that other senior managers and supervisors are all performing their duties as usual and the board is functioning normally. Production and operations remain stable, it said.

Vantone, established in 1991 by six businessmen including Feng Lun, listed on the stock market via a reverse merger with Beijing Pioneer Food and Agriculture in 2000. The 71-year-old Wang is one of the founders of Pioneer Food and previously served as its vice chairman. Wang and Feng have clashed many times over control of Vantone.

In 2016, Wang, through his investment firm Jiahua Dongfang Holdings, injected CNY3.2 billion (USD446 million) into Vantone, becoming its largest shareholder. In the same year, he also acquired all of Feng's shares in Vantone, leading to Feng's departure from the company.

Since then, Vantone has attempted to diversify away from the property business, but with limited success. Heavily impacted by China’s real estate market slump, the firm has reported losses for three consecutive years, totaling CNY1.2 billion (USD167 million).

Editors: Dou Shicong, Tom Litting