THE Shanghai Stock Exchange will investigate investment funds that purchased excessive amounts of shares in the recent initial public offering (IPO) of Foshan Haitian Flavouring and Food Co., domestic media reported.

    The Shanghai Securities Journal report comes as regulators try to dampen excessive speculation and curb volatility in the country’s IPO market, which reopened in January after being frozen since late 2012.

    Foshan Haitian, which raised 1.9 billion yuan via the IPO, began trading on the Shanghai exchange Feb. 11 and spiked on debut, opening at 61.5 yuan (US$10.08) per share and then shooting up as high as 73.8 yuan at one point.

    The bourse was investigating funds that bought large amounts of shares on the first day of trade in line with regulations, the paper said Tuesday.

    An official at the Shanghai exchange’s public relations department confirmed the newspaper report.

    According to the regulation, issued by the exchange in December, any investment account or group of accounts controlled by a single investor purchasing 1 percent or more of new shares listed on the first day of trading will be subject to scrutiny by the exchange.

    The restart of IPOs in China has already proven rocky, with multiple companies suspending listing plans after being accused of overpricing their shares to provide generous cashouts for insiders. (SD-Agencies)