Wang Jiangsui, wife of Chinese real estate tycoon and Vanke chairman Wang Shi, has sold 46,900 Vanke shares to allay allegations of insider trading, sources with Shenzhen Stock Exchange (SSE) have confirmed.
The shares bought on July 6 at 19.38 yuan (US$ 2.55) each surged 36 percent to 26.36 yuan on Monday.
The purchase was "procedurally legal" as it had been reported to the board secretary of Vanke and was published on the SSE website, while Vanke had provided the SSE with all the required information, said SSE officials.
However, an official said, "We will follow up the investigation and impose penalties if any wrongdoing is found."
Vanke chairman Wang Shi wrote in his blog on Friday that the stocks were bought by an agent in the name of Wang Jiangsui without informing the couple in advance. All profits from the transaction were handed over to Vanke Co. Ltd..
"It seems unimaginably strange to outsiders and very embarrassing for us," Wang wrote.
Wang Shi apologized to investors on his blog, but insisted that there was no insider trading and it was only a "mistake" by the agent.
The SSE has been closely monitoring the executives of listed companies and their relatives who buy stocks in their own companies. The SSE recorded 780 such transactions from May 9 to July 20.
Officials with the SSE advised "special investors" to be aware of the risks of insider trading and the harsh penalties incurred.
In China, executives of listed companies are not allowed to sell or buy stocks of the companies within six months of buying or selling the stocks, among many other restrictions.
Vanke, founded in 1984, is one of the first publicly listed Chinese mainland enterprises, with its core business in residential property and development.
By the end of 2006, Vanke's assets totaled 47.7 billion yuan with net assets of 14.96 billion yuan.
(Xinhua News Agency July 26 2007)