Trading suspension goes unexplained

Trading in China's first listed construction company, Zhejiang Guangsha Co, was suspended on Monday morning, the first day of trading of 2015, before the stock market opened.

Lou Zhongfu, founder of the Guangsha Group and honorary chairman of the board was reported to have been taken away by staff of the Central Discipline Inspection Commission on Dec 27.

Thepaper.cn has reported that Lou has a business relationship with Gu Liping, wife of senior Party official and national political adviser, Ling Jihua, who came under investigation for alleged disciplinary violations in December.

The Shanghai Stock Exchange said Zhejiang Guangsha applied to suspend trading on Monday for the inspection of related matters.

"There's no confirmed information to be announced to the public yet," staff from the company board secretary's office told National Business Daily, but the staff confirmed that the emergency suspension was related to Lou.

Lou had told thepaper.cn that the company he co-established with Gu was to support youth startup entrepreneurship. He said that he only provided the capital for Gu's foundation and was never involved in its specific business.

Guangsha Group said in its announcement on Monday that Lou has not served in any official position at the listed company and that the case won't have a huge influence on the company's daily operations. Lou Ming, the eldest son of Lou Zhongfu and chairman of the board of Guangsha Group, was unavailable for comment.

In a separate development, Founder Group announced on its website on Monday night that four company executives are under investigation, including board members Wei Xin, Li You and Yu Li.

Li Guojun, vice-president of the group and younger brother of Li You, is also reportedly under investigation; both are said to have connections to Ling Jihua.

Founder Group was established in 1986 by Peking University, with 70 percent of its total shares held by PKU.

The announcement from Founder Group also said the company's board of directors has elected three new members to replace those who are under investigation.

The three new members－Huang Gui Tian, Meng Qing Yan and Wei Jun Min－all have a Peking University education or working background.

Caijing.com.cn quoted insiders as saying the move will be better for the stable management of the group and also for the investigation.

The announcement also said the changes have not affected the company's operations.

"It is still hard to define the seriousness of the case," Caijing.com.cn quoted legal staff as saying.

The move to find replacements so quickly suggests the case may not be simple, the staff said.

Founder Group gained close attention from the public for the recent long dispute with Beijing Zenith Holdings.