Shenzhen Stock Exchange Questions Ylz Over Using Blockchain and ‘Vaccine Scandal’ Hype to Drive the Stock Higher
The Shenzhen-listed listed Ylz Information Technology has been questioned by the Shenzhen Stock Exchange on Wednesday evening over its blockchain business in partnership with Alibaba’s Ant Financial.
Ylz, a Xiamen-based software firm, has cooperated with the Alibaba’s fintech arm since March on developing blockchain technology to track vaccine. And the company has publicly restated that the company has cooperated with Ant Financial to utilize blockchain to track and trace vaccine and prevent the outflow of prescriptions in the wake of China’s latest vaccine scandal which has incited widespread fury recently.
Following the announcement released on July 23, Ylz sees its share price has climbed to the daily upper limit for three consecutive days,trading at 10.7 yuan at the press time. This price shows a 26 percent jump from the low point of 7.83 yuan on July 20.
The steep gains in Ylz’s share prices draw attention from the Shenzhen Stock Exchange which is concerned about the company’s attempt to use the buzzword blockchain to drive a rally in its stock price.The bourse needs to self-regulates public listed firms to comply with securities law in China.
The Shenzhe Stock Exchange in the letter ordered the firm to provide details over the current status of its blockchain business in collaberation with Ant financial, including related personnel, capital, technical foundation, as well as the company’s core competitiveness and the feasibility of its blockchain solutions. Besides, the company was required to clarify whether the blockchain business would have a major influence over the firm’s operations and to adequately disclose relevant risks to investors.
Along with the response to its inquiries, the exchange requested Ylz to prove that it is not taking advantage of blockchain hype to intentionally drive up its stock price.
Although a lot of blockchain industry celebrities in China, including bitcoin tycoon Li Xiaolai, believe blockchain is expected to solve drug safety problems in the country, the technology is still in its infancy and can still carry fake data if someone intends to falsify records, according to a research report from Tencent.