(Yicai Global) Nov. 3 -- The former board secretary of Gree Electric Appliances was involved in an insider trading case at the same time when the Chinese air conditioner giant was increasing its shareholding in air con parts maker Highly Group, according to authorities.

Gree Electric's former vice president Wang Jingdong had four phone calls with investor Yu Jun during a sensitive time period in 2018, the China Securities Regulatory Commission's Guangdong bureau said in a statement on its website yesterday. It added that Wang had also told other people on WeChat: "Buy Highly if you have money. It will be announced tomorrow."

Yu will need to repay CNY3.7 million (USD549,792), some CNY921,700 (USD137,666) of which is his illegal gains from the transactions. The verdict didn't disclose Wang's penalty. On Aug. 17, Gree Electric said that Wang has resigned due to "personal reasons" after serving the company for 11 years. His salary was CNY3.6 million in 2019, according to public data.

Shanghai-based Highly is one of China's largest air con compressor manufacturers as it sold 22.4 million units in 2017, resulting in a 12.5 percent market share, the third-largest in the country.

The story started with a corporate investment plan. On April 20, 2018, Chairwoman Dong Mingzhu told Wang that she would like Gree Electric to increase its shareholding of Highly, according to the bureau's investigation.

On July 5, Highly disclosed that the Zhuhai-based company had bought 43.3 million shares in it from April 23 to July 4, 2018, with prices ranging from CNY9.69 to CNY12.08 (as low as USD1.50). Meanwhile, its stake rose to 10 percent from 5 percent. That caused Highly's stock price to jump by the daily limit and close 5.4 percent higher on July 5.

The timing was delicate. Yu purchased 930,000 Highly shares from May 30 to July 2, 2018, and sold them all from June 27 to July 9, 2018. Yu was not able to rationally explain why he bought the shares just right then, the bureau added.

Highly's stock price [SHA: 600619] rose 4.4 percent to CNY7.33 this afternoon.

Editor: Emmi Laine