A ByteDance employee has been heavily fined from profiting from insider information of a digital publishing company it had partnered with, China’s market regulator said on Monday.
Wang Teng, 29, an employee of ByteDance’s Tomato Novel
platform in Tianjin, was fined nearly nine times the 54,880 yuan (US$8,845) profit he made from selling 55,700 shares of Shenzhen-listed COL Digital Publishing, an investigation by the Dalian branch of the China Securities Regulatory Commission found.
Tomato Novel, ByteDance’s free online literature platform, planned to develop its audio business in February last year, in which Wang was involved. He began discussions with COL Digital for a potential partnership since March 4, according to the document by the CSRC. His involvement constituted insider information and was a violation of China’s securities laws, the CSRC said.
ByteDance and COL Digital had signed a cooperation framework agreement on July 14 last year, which the publishing firm disclosed in an exchange filing
on July 15, 2020.
ByteDance’s Tomato Novel
has more than four million web novels. Photo: Handout
Wang bought the shares of COL Digital on July 13 and 15 last year, and sold them on July 16, 2020.
ByteDance and COL Digital did not immediately respond to requests for comment.
COL Digital Publishing Group was founded in Tsinghua University in 2000. The company listed on the GEM board of the Shenzhen Stock Exchange in January 2015, and has over four million web novels, according to its website.
Beijing-based ByteDance, operator of short-video sharing hit app TikTok, and its Chinese version Douyin saw its revenue more than double last year, as the company’s valuation soared ahead of a highly anticipated initial public offering (IPO).
ByteDance said in late April that it was not ready to go public, at least for the time being, amid mounting market speculation about a listing.
The Chinese start-up has had difficulties coming up with a business structure that can please both Beijing and Washington, sources told the Post.