Shares of the seven listed firms linked to the family of Ling Jihua fell yesterday as probes into the top aide to former president Hu Jintao prompted investors to cash out amid fears of a further slide. All the seven companies including LeTV, one of the mainland's leading entertainment portals, and Beijing Ultrapower Software saw panic selling as investors rushed to exit. The companies, mostly small-cap and startup firms listed on the SME board and ChiNext board at the Shenzhen Stock Exchange were partly invested by a private equity group Huijin Lifang controlled by Ling Wancheng, a brother of Ling Jihua. "Investors had been fully aware of the risks in the companies for a while," said West China Securities analyst Wei Wei. "The official publication of the news about investigations into Ling Jihua convinced them to dump the shares." Elefirst Science & Technology, a company dealing with solar energy which was invested by Huijin Lifang, yesterday dropped to the 10 per cent daily trading limit, closing at 7.88 yuan. LeTV which has been surrounded by suspicions over its qualification for listing in 2010, tumbled 3 per cent to 29.23 yuan. On the mainland, the China Securities Regulatory Commission (CSRC) had the final say on initial public offering (IPO) approvals. A source close to the regulator said that Li Liang , a CSRC official formerly in charge of reviewing listing applications for companies due to list on the Nasdaq-style ChiNext market between 2009 and 2012, had helped Huijin Lifang secure the go-aheads to get seven of its portfolio firms listed. Earlier this month, Li was taken away by the Communist Party's top anti-graft inspectors on suspicion of committing "legal infringements" and "disciplinary violations", a common euphemism for corruption. According to business news publisher Caixin, Ling Wancheng used the name Wang Cheng to run Huijin Lifang and seven companies invested by the private equity group went public between 2008 to 2010. Revelations about Huijin Lifang's investments added credence to suspicions that China's stock market was still dominated by a well-connected, powerful elite rather than market forces. When the startup ChiNext board was launched in 2009, there were suspicions about the quality of the firms. "It was believed that a group of the firms listed on the market received the nod for their IPOs through their bosses' connections with senior government officials," said Ray Lu, a director of Hotung Ventures. "The firms related to Ling's family were among the companies." Ultrapower Software in which Huijin Lifang invested, derived most of its revenue from a single contract to provide China Mobile's instant-messaging service. Shares of Ultrapower Software slid 7.4 per cent to 16.2 yuan yesterday.