SHANGHAI Jahwa United Co, a cosmetics maker, suspended trading on the Shanghai Stock Exchange yesterday after Ge Wenyao, chairman of Shanghai Jahwa Group, the parent of Jahwa United, was removed from office on Monday.

The suspension was due to an "important undisclosed issue," the bourse said in a statement on its website yesterday. The cosmetics maker is set to hold its annual shareholders' meeting today.

Ge, a Jahwa veteran, admitted on his Twitter-like weibo account yesterday, that he had "played the grey area" when the firm was arranging benefits for Jahwa staff as a means to attract and retain professionals at the company. Ge said he will shoulder responsibility for that.

Jiahwa fell more than 8 percent in Monday's trading before closing at 69.99 yuan (US$11.30) on media reports of boardroom infighting between Ge and Jahwa's investor Ping An Insurance (Group), China's second-largest insurer.

Zhang Liqing, deputy general manager of China Ping An Trust, the controlling shareholder of Jahwa Group, was appointed the new chairman of the group. However Ge will remain the chairman of the listed arm, Jahwa United.

Ping An said it has received internal staff reports since March against Jahwa management, which included allegations of keeping off-the-books accounts, personal treasury, and public fund embezzlement.

A huge amount of money was involved and individual executives were suspected of "serious law and discipline violation," Ping An said.

Jahwa United issued a statement on its official microblog account yesterday saying executives are banned from making procurement decision.