(Yicai Global) Aug. 14 -- The China Securities Regulatory Commission is investigating drug and pharmaceutical ingredient maker Hunan Er-Kang Pharmaceutical Co. [SHE:300267] over allegations of unlawful information disclosure.

The pharmaceuticals firm has also seen its share de-rated by three major funds to the tune of CNY469 million (USD69 million) in floating deficits. The company's actual controller Shuai Fangwen, in concert with its director Cao Zaiyun, has already cashed out 103 million shares for around CNY1.23 billion.

Er-Kang Pharmaceutical confirmed stock transactions may be suspended due to the investigation. The firm has seen its shares suspended for the last three months.

China Post Fund, China Asset Management Co. and Essence Fund have all de-rated company shares. Prior to the suspension, its share price was CNY11.46 (USD1.72). China Post Fund and China Asset Management de-rated its price by 19.98 percent to CNY9.17, while Essence Fund downgraded it by 27.14 percent to CNY8.35.

At the end of this year's second quarter, 17 funds from 10 fund companies held a total of 151 million shares in Er-Kang Pharmaceutical, making up 13.87 percent of stocks in circulation, of which China Post Fund and China Asset Management hold 8.91 percent and 4.71 percent stakes, respectively.

Er-Kang Pharmaceutical was listed in 2011 and produces pharmaceutical adjuvants. Its major products include starch, starch capsules, and medicinal sucrose.