Guangzhou Haozhi Electromechanical Co., Ltd. (Haozhi Electromechanical) announced on December 31st that its chairman was fined 109 million yuan for suspected market manipulation.
In the announcement titled “Notice Regarding Administrative Penalty Decisions Received by Related Personnel” on December 31st, Haozhi Electromechanical stated that the company’s controlling shareholder, actual controller, chairman Tang Xiuqing, and company director, board secretary, deputy general manager, and CFO Xiao Yonglin received notifications of the “Administrative Penalty Decisions” from the China Securities Regulatory Commission. The “Administrative Penalty Decisions” revealed that the two were fined 109 million yuan and 2 million yuan, respectively, for suspected market manipulation.
According to the report from Fengmian News, the reason behind the punishment of key figures in Haozhi Electromechanical may be related to an “old case” from May 2021.
At that time, a figure known as the “private placement champion,” Ye Fei, publicly reported that several listed companies were illegally managing their market value, engaging in account manipulation, and failing to pay the agreed amounts to the parties involved. Ye Fei named over ten listed companies on Weibo, accusing their management teams of colluding with market operators to manipulate the market under the guise of “market value management,” with Haozhi Electromechanical being one of them.
It was reported that Haozhi Electromechanical’s stock price started at 8 yuan per share in mid-2019 and surged to around 21 yuan per share in November 2020, within a year and a half. During this period, Tang Xiuqing, Tang Lijun, Tang Xiusong, the three siblings, and the concerted action party Guangxi Haoju have been steadily reducing their holdings since February 2020, cashing out billions of yuan.
After the Tang siblings reduced their holdings at a high level, Haozhi Electromechanical’s stock price suddenly plummeted in the afternoon of December 8, 2020, hitting the limit down that day and plummeting over 13% the next day. Subsequently, the company’s stock price continued to fall from the peak of 18.4 yuan per share to 9.23 yuan per share on January 13, 2021, nearly halving. This led Haozhi Electromechanical to be referred to as a “slaughter plate.”