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Chinese Tech Firm Under Scrutiny After Chairman’s Wife Secretly Trades $21 Million in Stock

Posted on April 12, 2024
Writer: James Miller

Chinese regulators are investigating Dawning Information Industry Co., a leading AI and computing firm, after discovering unauthorized stock trades by the chairman’s wife, Zhang Dihua.

Dihua traded 150 million yuan ($21 million) of company stock, profiting 590,000 yuan through 232 trades between March 2023 and March 2024, a period during which the company’s stock value increased by over 50%.

The trades occurred amidst a surge in investment in Chinese tech firms expected to benefit from advancements in AI technology. 

Although Dawning has admitted to the stock trades following a stock exchange inquiry and issued an apology, the company maintained that Chairman Li Guojie was unaware of his wife’s activities.

The incident emerges as Chinese authorities intensify efforts to combat insider trading and other market irregularities. 

Despite the controversy, Dawning’s stock rose by 4.1% on Friday, April 12. The company, known for developing high-performance chips and servers, continues to be influential in China’s tech industry, although it has faced sanctions from the U.S. since 2019.

Zhang’s trading began just before a significant rally in Dawning’s stock. She has since returned all profits from these trades in accordance with securities laws, and Dawning has announced plans to enhance compliance training for its executives.
For more information, read the full article on Bloomberg.

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