The China Securities Regulatory Commission on April 2 notified Kingfa Sci & Tech Co. Ltd., the nation's largest plastic compounder, that three current and former company executives are under investigation for questionable stock purchases. Guangzhou-based Kingfa disclosed the news in an announcement.

The three executives include board members Xia Shiyong and Li Jianjun, as well as a former senior manager, Huang Xianbo, who was a deputy director of the corporate technical center.

Kingfa launched its stock options program in 2006. By June 30, 2007, Xia owned 31.58 million shares of Kingfa stock, Li 8.74 million shares, and Huang 3.28 million shares. Huang left the company in September 2007.

Public records show that nearly a dozen of Kingfa executives have been selling stock since December 2008. Li, alone, sold 2.3 million shares in late December.

Chinese media quoted anonymous sources as saying illegal stock selling by executives is not uncommon in China. The usual consequence of such case is the companies seize the earnings from the executives. That Kingfa's executives are being investigated by the CSRC perhaps indicates the severity of the case, a few media reports said.