(Yicai Global) Jan. 12 -- Chinese regulators suspect ZQGame may be exploiting the hype surrounding what many believe to be the next stage of the internet. The video games developer has drawn huge investor interest since saying it would develop a metaverse game and it intends to add the buzzword to the name of an affiliate it plans to take over.

The Shenzhen Stock Exchange has asked ZQGame to explain why it plans to take a majority stake in the affiliate for no charge, according to a letter the bourse sent to the firm yesterday. The SZSE also asked ZQGame to clarify whether it is is deliberately hyping the metaverse concept by adding the word to the affiliate’s name and by making frequent announcements related to the concept.

ZQGame’s Hong Kong-based unit will take a 51 percent stake in Powerleader Asset Management Hong Kong for HKD0 from its actual controller Li Ruijie, who is also the game developer’s chairman, Shenzhen-based ZQGame announced on Jan. 10. The name will be changed to Powerleader Metaverse Digital Platform.

ZQGame’s stock price [SHE: 300052] has more than quadrupled since it announced in September that it would develop a metaverse game that will task players with being winery operators in a China set 100 years ago.

Despite the skepticism of watchdogs, the company’s shares jumped a further 4.8 percent today to close at CNY34.62 (USD5.44) each, after gaining 3.5 percent yesterday.

After last year’s share price increase, ZQGame said on Jan. 10 that Li and two firms he controls would sell up to 3 percent of their shares in the company. Investors and the SZSE have questioned the move. The bourse asked ZQGame to explain if it is driving up its share price by promoting the metaverse concept, so that shareholders can cash in.

Editors: Dou Shicong, Futura Costaglione