(Yicai Global) Oct. 13 -- China's Guolian Securities has terminated its plan to merge with larger brokerage peer Sinolink Securities to form a financial behemoth worth nearly CNY100 billion (USD14.8 billion) amid regulatory scrutiny. Their shares also took different directions today.

The pair has no major asset restructuring plans in sight over the month to come, the two brokerages announced separately yesterday, without disclosing which terms could not be agreed on. Scrapping the deal should not affect the companies' normal operations, they added.

Guolian's Shanghai-listed equity [SHA: 601456] slid 5.2 percent to CNY18.62 (USD2.80) in the morning, ending a trading suspension that started after Sept 18.

Shares of Sinolink [SHA: 600109] climbed 5.6 percent to CNY15.53.

The rivals, both of whose shares had jumped by the daily upper limit of 10 percent before their trading suspensions began, will leave the negotiation table with new worries.

The China Securities Regulatory Commission had demanded the firms to conduct self-inspection and submit a list of people with knowledge of the merger plan that was leaked, the regulator's spokesperson Chang Depeng said on Sept. 25.

Guolian was originally planning to issue new shares to all of Sinolink’s stockholders in an equity swap and buy a 7.82 percent stake from controlling shareholder Yongjin Group, according to the Wuxi-based bidder's statement, published on Sept. 20.

A combination of the pair could best be described as a snake swallowing an elephant, according to analysts. Chengdu-based SInolink's assets tallied CNY65.4 billion (USD9.7 billion) at the end of June, nearly twice that of Guolian, according to public data.

In the first half of this year, Guolian made nearly 10 percent less in net profit at CNY321 million (USD47.5 million) from a year ago, according to its earnings report. Its revenue was down 3 percent at CNY822 million.

Over the same period, Sinolink's net profit jumped 61 percent to CNY1 billion (USD148.1 million) while its revenue was 51 percent up at CNY2.9 billion, based on its earnings report.

Editor: Emmi Laine