(Yicai Global) Jan. 5 -- The local bureau of the China Securities Regulatory Commission said that it has issued a warning letter to the Qingdao-based fund sales arm of Leshi Internet Information & Technology Corp. [SHE:300104] for violating the Administrative Measures for the Sale of Securities Investment Funds.

The Beijing-based company manages the unit's official seals and personnel archives, the Qingdao arm has loaned CNY19 million (USD2.9 million) of its CNY20 million paid-in capital to shareholders without getting the general manager to sign off and its employees' expenditures are present in the accounting records of Lexin Internet Technology Co.

Each of these is a violation, the regulator said, adding that Leshi's Qingdao subsidiary has started rectifying the issues.

Leshi founder Jia Yueting has been embroiled in controversy since the group approached rock bottom early last year, amassing debts of over CNY20 billion.