(Yicai) Aug. 5 -- Shares of 360 Security Technology fell after the major Chinese cybersecurity firm said the privatization consortium formed when it delisted from the US stock market will be wound up and its members will become shareholders with the right to sell.

After tumbling by as much as 5.4 percent in Shanghai earlier today, 360 [SHA: 601360] closed down 4.1 percent at CNY7.29 (USD1) a share.

Tianjin Qixin Zhicheng Technology, the privatization group that owns 46.1 percent of 360, has met the dissolution terms that were agreed upon when it was set up in 2016 and will be liquidated, Beijing-based 360 said on Aug. 2.

The group’s members seek a return on their investment, whose term has been long exceeded, 360 Board Secretary Zhao Luming said at an investor briefing the next day. After the disbandment, any subsequent sale of 360's shares by the new shareholders will be in line with China’s securities regulations, Zhao said.

Any subsequent stock sales by them could weigh on 360’s share price, which has already slumped 18 percent since the start of the year and has lost nearly 90 percent of its value since hitting a record high of CNY66.20 (USD9.28) soon after the firm relisted in the Chinese mainland in 2018.

The privatization group’s dissolution will give founder, Chairman and Chief Executive Officer Zhou Hongyi a 13.3 percent stake in 360, making him the largest shareholder. The other 36 members of the consortium will also receive commensurate holdings. When the group was formed in 2016, Zhou had 17.4 percent, while the others had between 0.4 percent and 13.1 percent each.

360 has lost money for several years in a row. Its net loss shrank 78 percent to CNY492 million (USD68.9 million) last year, while revenue fell 5 percent to CNY9.1 billion (USD1.2 billion).

Editor: Kim Taylor