Yunnan Green-Land Biological Technology

YACF: Yet Another Chinese Fraud

"Yunnan Green-Land Biological Technology, a company traded on the SME board on the Shenzhen Stock Exchange, announced recently that chairman He Xuekui was detained by police for alleged cheating in the firm's initial public offering three years ago. Details of any fraud in the IPO have yet to be made public.

The chairman is the first company executive to have been arrested by police due to misbehaviour in a listing process.

The Green-Land case spooked investors, who fear that a series of similar scandals could be unearthed as the authorities step up investigations into questionable listed companies.

"It could result in another crisis of confidence, though it would not be as severe as the Guangxia scandal years ago," said Guotai Junan Securities analyst Shi Weixiang."