(Yicai Global) Aug. 20 – Chinese electrical device maker Hangzhou Zhongheng Electric opened at the 10 percent lower price limit this morning on news that its Chairman Zhu Guoding is under investigation by the China Securities Regulatory Commission for suspected stock price manipulation.

The company’s shares [SHE:002364] stopped trading at CNY12.65 this morning, per bourse rules.

Zhu has received a notice of investigation from the CSRC, which charged him with fiddling Zhongheng’s stock price and refusal to cooperate with the securities regulator in performing its duties, the company announced yesterday, but without detailing the allegations against Zhu. These probably relate to the firm’s actions following his February statement that he and his wife Bao Xiaoru were to cut their stake in the firm by 3.18 percent in half a year, Shanghai Securities News surmised in its report.

“The firm is cooperating with Tesla in a ‘destination service’,” the firm’s executives told its investors on Feb. 20 after Zhu announced the stake cut, but did not explain what this ‘destination service’ was, adding “The firm is expanding our stock of charging piles market to sustain swift growth of our charging pile business.”

Zhongheng’s shares rose around 17 percent in the four trading days following this statement.

The firm did not conclude a formal cooperation agreement with Tesla, it said in reply to a Shenzhen Stock Exchange inquiry letter on Feb. 25, explaining the ‘destination service’ was to “set up charging facilities for Tesla on the company’s premises.”

Zhongheng’s stock price closed at CNY10.39 per share on Feb. 6 when its chairman released his stake cut plan and climbed up to CNY16.01 per share in just over one month thereafter.

Zhu and his wife have previously violated CSRC standards in a share transfer. The Shenzhen bourse and the CSRC’s Zhejiang arm issued warning letters to them last year and recorded these in their securities and futures market credit files.

Editor: Ben Armour