Changfang Lighting announced on Aug. 15, 2014 that the company’s restructure application to absorb Kang Ming Sheng Industrial (KMSI) was halted by China Regulatory Commission over suspected insider trading by financial organization Guosen Consultant, according to several Chinese media reports.

In the statement, the company said it did not receive any investigation notice from authorities yet, according to a report from Chinese-language financial media Panorama Network.

Based on info from the restructure proposal, Changfang Lighting will be acquiring 60 percent of KMSI shares for RMB 528 million (US $ 85.86 million) through cash and issuance of stocks, according to a Sinai report. According to the deal KMSI net profit cannot be lower than RMB 80 million, RMB 105 million, and RMB 128 million respectively for 2014, 2015 and 2016.

Changfang Lighting hopes to expand into downstream LED market with this latest acquisition. KMSI is a manufacturer specializing in LED flash lights, LED emergency lights and 600 other LED products. The company’s product portfolio covers wide applications including outdoor leisure, firefighting, petroleum industrial lighting, mining and others.

Changfang Lighting will be acquiring shares from 29 KMSI investors including Dichu Li, Yinghong Li and Wei Nie. The company will be paying RMB 79.20 million of the transaction in cash, and the remaining RMB 449 million in the form of company stocks.

In the process of planning the restructure, Changfang Lighting has halted trading on the bourse since March 13, 2014. According to the company’s own financial investigation, independent financial consultant Guosen Consultant acquired 380,000 company shares on Feb. 11, 2014, and sold these shares on Feb. 28, 2014. Changfang Lighting claimed the financial institute based the trade on published company information and trade situation in secondary markets, and was not based on the recent acquisition plan.