Breaking News: Chinese listed company Wantong Development has issued an unexpected announcement that Wang Yihe, the actual controlling person and chairman, has been detained by the Beijing Public Security Bureau to assist in an investigation. His family members emphasize that the matter is unrelated to the company’s daily operations. However, according to financial sources, the Public Security Bureau’s Economic Investigation Team is investigating Wang Yihe for suspected insider trading and other economic crimes.
The announcement from Wantong Development (600246.SH) on the evening of August 18 revealed that the 71-year-old chairman, Wang Yihe, has been confirmed to be detained by his family members. On the same evening, the company urgently convened the 21st extraordinary meeting of the 9th board of directors and elected the current CEO, Qian Jingzhou, to temporarily perform the duties of chairman and legal representative. Wantong Development stated that the company’s daily operations will not be significantly impacted by the personal issues of the chairman.
An economic source close to the regulatory authorities in Beijing, Mr. Zhou, revealed to the press that “Wang Yihe may be suspected of economic crimes and was taken away by the police a few days ago. It is unclear where he is currently located. I heard that the Economic Investigation Team of the Public Security Bureau is investigating, possibly involving crimes related to taxation, corporate transactions, and more. Many top executives of listed companies’ financial situations are currently under scrutiny.”
Mr. Zhou added that although Wang Yihe’s family members have emphasized that the case is unrelated to the company’s operations, considering recent fluctuations in the company’s stock price and high-priced acquisitions, there may be a connection to market trading activities. He mentioned, “The regulatory authorities are very concerned about the funding sources, assessment criteria, and potential insider trading of Wantong Development’s recent cross-border acquisitions. Wang Yihe’s investigation is closely linked to insider trading.”
The response in the Chinese stock market was more intense than the “stable” described in Wantong Development’s announcement. On August 18, Wantong Development’s stock price hit the limit down shortly after the market opened, closing at 9.58 yuan/share, with a total market value falling to 18.11 billion yuan. Investors evidently have concerns about the company’s future stability and transformation process.
Earlier, on August 10, Wantong Development announced its plan to acquire 62.98% of the equity of chip company Shuduke Technology for 854 million yuan, which had attracted industry attention. A financial journalist in Beijing, who preferred to remain anonymous, revealed that Wang Yihe’s investigation is related to recent transactions: “I heard that the acquisition of Shuduke Technology’s equity involved insider trading, was reported, and the previous acquisitions were also reported. The government is short of money now, so the investigations are thorough. I know of at least four to five companies that are (under investigation).”
Wantong Development, originally a well-known real estate enterprise, has been gradually reducing its real estate investments since 2015 and has established a new development path focusing on the communications and digital technology industries. The acquisition plan aims to enter the high-threshold areas of integrated circuits and AI infrastructure. However, Shuduke Technology has accumulated losses of over 230 million yuan in the past three years and has yet to turn a profit. This acquisition has raised doubts from the Communist Party’s regulatory authorities due to the high premium, prompting the Shanghai Stock Exchange to request the company to provide additional explanations on the transaction logic and valuation basis.
As of the end of June 2025, Wantong Development is still in a state of continuous losses. According to reports from several mainland media outlets on the 19th, Wantong Development stated that after recovering some debts, they still have approximately 800 million yuan in cash available. However, if the integration and acquisition do not proceed as expected, the financial risks will further intensify.
In recent years, several real estate firms or transitioning companies in mainland China have seen their top executives suddenly investigated. For example, in May of this year, the chairman of a large real estate company in southern China was investigated for economic issues, leading to a halt in stock trading and financing plans being put on hold. In 2023, the founder of a new energy company was detained, resulting in stricter credit from banks and hindering capacity expansion, while in 2019, Kangde Xin faced delisting due to senior executives being arrested and financial fraud.
Another Beijing investment banker, Mr. Zhao, who has been closely following the transformation of real estate companies, expressed to reporters, “Real estate firms like Wantong Development, which are urgently transitioning to the technology industry, inherently face funding, technical, and team deficiencies. If senior management faces legal risks at critical moments, it will be a significant warning for partners and financial institutions, making future financing and mergers more challenging.”
Public opinion generally believes that in the past decade, the wave of transformation of Chinese enterprises has been continuous, from real estate transitioning to new energy, from the internet turning to manufacturing, and then venturing into the chip industry reliant on policy subsidies. These moves driven by clear policy and profit motives have made regulatory authorities increasingly uneasy.