(Yicai Global) July 18 -- On July 16, Beijing Wandong Medical Technology Co. [SHA:600055] and Jiangsu Yuyue Medical Equipment & Supply Co. [SHE:002223] –the latter operating under the Yuwell trademark -- issued the same announcement that their joint president, Wu Guangming, is under investigation by China Securities Regulatory Commission (CSRC) on suspicion of insider trading.

 The shares of Yuwell Medical and Wandong Medical performed poorly as a result yesterday.

 Both shares hit limit down soon after the morning stock market opened. With their shares down 7.52 percent for the entire day, Wandong Medical opened at the limit down, while Yuwell Medical closed with it that day.

 Market players speculated that the investigation the CSRC is conducting may relate to Wandong Medical's transfer of 22 percent of its stock rights or its becoming a shareholder of Yunnan Baiyao Group Co. [SHE:000538].

To propel Yuwell Medical's listing, Wu established Jiangsu Yuwell Technology Development Co. (Yuwell Technology) in early 2007, with the shares jointly held by Wu and his son Wu Qun. Jiangsu Yuwell controls many other companies, including Yuwell Medical, Wandong Medical and several other medical industry enterprises, data show. After 10 years' expansion and acquisition, Wu's current Yuwell Technology controls five listed companies, respectively Yuwell Medical, Guangdong Biolight Meditech Co. [SHE: 300246], Flowers King Ecological Engineering Co. [SHA:603007], Wandong Medical and Yunnan Baiyao.

In April this year, Yuwell Technology transferred 22 percent of its shareholding rights in Wandong Medical to Yu Rong, the actual controller of Meinian Onehealth Healthcare Holdings Co. [SHE:002044], an equity transfer that aroused the Shanghai Stock Exchange's concern. Then Yunnan Baiyao announced June 6 that Yuwell Technology planned to invest USD829 million (CNY5.64 billion) in the former's controlling shareholders. After the completion of the capital increase, the company will hold a 10-percent stake in the company to become its third major shareholder.

Wu himself established Yuwell Medical and it listed on the A-share market in 2008.