At least 10 Chinese companies say major shareholders would extend share sale ban

SHANGHAI (Reuters) - At least 10 Chinese companies said their controlling shareholders or senior executives would not sell shares on the secondary market within the next six or 12 months, in an attempt to prop up China’s stock market after a 7 percent plunge.

The market slump on Monday was partly triggered by fears that a six-month ban on share sales by listed companies’ major shareholders, imposed during the height of a market rout last year, will expire on Jan. 8, unlocking an estimated 1.24 trillion yuan ($190.23 billion) worth of shares.

Zhejiang Century Huatong Group Co Ltd 002602.SZ, a Chinese maker of plastic spare parts for automobiles, was the first company to announce a voluntary extension of the ban.

It said late on Monday that its controlling shareholder would not sell shares on the secondary market until Jan. 9, 2017, in a bid to maintain price stability and help protect the interest of smaller shareholders.

A slew of other companies including Shandong Sun Paper Industry Co Ltd 002078.SZ, Zheijiang Sanhua Co Ltd 002050.SZ and Changshu Tianyin Electromechanical Co Ltd 300342.SZ published similar statements.

China’s securities regulator said on Tuesday that it is studying rules to regulate share sales by listed companies’ major shareholders and senior executives.

Reporting by Samuel Shen and Pete Sweeney; Editing by Kenneth Maxwell and Stephen Coates