Shanghai Hongsheng Technology, a Shanghai-listed integrated circuit product maker, said chairman Long Changsheng was detained for alleged contract fraud - the latest top boss of a publicly traded mainland firm to be embroiled in commercial crime.
The company said in a filing to the Shanghai Stock Exchange yesterday that Mr Long was in custody for allegedly cheating in commercial deals. No details were provided. The stock slid 3.4 per cent to 11.68 yuan.
The detention of Mr Long, 46, comes after the jailing of Sanjiu Group's Zhao Xinxian and Guangdong Kelon Electrical Holding's Gu Chujun, once among the country's star entrepreneurs as the chairmen of their companies. They were found guilty of commercial crimes.
'It is yet another example that fraudulent cases are rampant among listed firms,' said a Beijing-based source close to the China Securities Regulatory Commission. 'Investors are now used to hearing such news.'
Last year, Shanghai Hongsheng was ranked by Global Entrepreneur magazine as one of the top 50 mainland-listed firms. The company has a 5 per cent share of the camera memory-card market in the United States, according to Caijing magazine. Its customers include Wal-Mart Stores and Best Buy.
It reported profit of 60.74 million yuan in 2006, up 23.25 per cent from a year earlier. The company's first-half earnings rose 2.07 per cent to 34.15 million yuan last year.