(Yicai Global) May 9 -- Chinese automaker JAC Motors may be severely punished for allegedly using flawed pollution-control devices and faking emission tests for sales purposes, Beijing's environment watchdog said recently.

The Beijing Municipal Ecological Environment Bureau planned to hold a hearing and declare the penalty last month, but it postponed that to May 16 after Hefei-based JAC applied for a delay, according to a statement posted on the bureau's website on May 5.

The statement did not give details about the models or the number of vehicles involved in the case. Though they were mainly commercial vehicles, details remain unclear, 21st Century Business Herald reported today, citing a JAC insider.

As early as 2014, media reports claimed ahead of the implementation of the national fourth-grade emission standards in some parts of China that JAC revised the models and corresponding codes of engines on vehicles' certificates, and passed off the cars as qualified under the country's fourth-level standard on emissions when they should have been sold as grade three. At that time, JAC said its dealers were responsible and that it would strictly manage its sales channels.

China, the world's biggest auto market, is in a slump, and if JAC is found guilty of counterfeiting and fraud, it could face a big fine, which would put a further drag on its already weak earnings. Net profit fell 69 percent to CNY64.6 million (USD9.47 million) in the first quarter of this year.

Shares of Jianghuai Automobile [SHA:600418], as JAC Motors is officially known, fell almost 1.5 percent today to close at CNY5.37 (79 US cents). The benchmark Shanghai Composite Index also lost 1.5 percent.

In January last year, the Ministry of Environmental Protection found that two car makers in Shandong province made vehicles whose pollution emissions exceeded the specified amount and faked the pollution-control devices. The ministry ordered them to stop production and handed out fines totaling more than CNY38 million (USD5.6 million). It was the first time the ministry had imposed financial penalties on automakers.