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What's really behind the resignation of all these GEM listed company executives? Some say they're cashing in early, on the rise of their growing enterprises.
Most investors and experts hold the same view. The resignations are to capitalize on shares the executives hold.
One investor said "It is very possible that they want to sell shares to get cash."
Yin Lizhong, Researcher of China Academy of Social Sciences said "The motive is very simple. They want to get more capital after shares put in restriction are released. It is beyond doubt."
Since the launch of the GEM board, many have become billionaires. There's roughly 400 senior executives holding shares worth over 100 million yuan in market value.
Shao Yongliang, Chief Researcher of China Listed Company Market Research Center said "Some senior executives hold many shares. One executive of a firm has 5 million shares. Based on market value, they are worth 150 million yuan."
Experts point out that based on regulations, senior executives can not sell their shares within 12 months after the company goes public. Even after 12 months, they are allowed to sell no more than 1 quarter of their holdings every year. But it seems they find a way out -- resignation. They can sell half of their holding six months after they leave their post.
Shi Yongliang, Financial Supervisor of Galaxies Securities said "Many of the executives resigned in March or April. After six months, it is October. It is the time restrictions are lifted. That is no coincidence. So we think there is something behind that."
Next month a large amount of shares will become tradable. 1.2 billion shares, worth 1 billion yuan from 28 firms will be up for grabs. It's expected to put huge pressure on stock prices.