Chinese authorities are questioning executives at Founder Group, a Peking University company that has denied allegations of insider trading and misappropriating state assets by a shareholder in its brokerage unit.

The group’s Chairman Wei Xin has been replaced by Huang Guitian, according to China Hi-Tech Group Co., one of Founder’s units. Wei and executives Li You, Yu Li and Li Guojun are assisting authorities with investigations, China Hi-Tech said in a Shanghai exchange statement last night that didn’t provide specifics of the probe.

The group’s Founder Securities Co. unit had 17 bank accounts frozen Dec. 31 through a court order obtained by Beijing Zenith Holdings Co., the brokerage’s second-largest shareholder. Shares of Founder Securities, China’s seventh- biggest brokerage with a market value of $12.9 billion, lost as much as 6 percent in Shanghai, falling for a second day.

In a statement published on its website on Dec. 8, Zenith said it had made a report to authorities accusing Founder Group’s management of wrongdoing including insider trading and selling state assets. Founder has denied the allegations and said Dec. 16 it had filed a police report against Zenith, claiming damage to its reputation.

Zhang Zhaodong has been appointed president of Founder Group, a role previously held by Yu Li, according to China Hi- Tech yesterday. Wei, the former chairman, couldn’t be reached for comment and Chen Xu, a company spokesman, said he had no information about Founder’s executives. Officials at Zenith weren’t immediately available to comment.

Joint Venture

Founder was established in 1986 by Peking University, with 70 percent of its equity held by the college, and 30 percent by management, according to the group’s website. The company has businesses in information technology, health care, real estate, finance and bulk-commodity trading, with 35,000 employees, six publicly traded units and annual income of 68 billion yuan ($11 billion) as of 2013, the website showed.

Two phone calls to Peking University Asset Management Co. went unanswered.

Founder Securities, based in Hunan province’s Changsha city, is China’s seventh-largest brokerage with a market value of almost $13 billion. The firm set up a joint venture, Credit Suisse Founder Securities Co., with Credit Suisse Group AG in 2008. Noel Cheung, a Credit Suisse spokeswoman in Hong Kong, declined to comment.

Seeking Compensation

In November 2013, Founder said it would offer to pull out of that venture as it prepared to acquire a competitor, Minzu Securities Co., from Zenith. Founder said last month it had sued Minzu and three board directors for violating shareholder interests.

Zenith filed in December an application for arbitration related to the Minzu transaction, Founder said in an exchange statement today. Zenith is seeking 3 billion yuan in compensation, according to the statement.

Seventeen of Founder’s bank accounts with 1.8 billion yuan of assets were frozen as of Dec. 31 through a court order obtained by Zenith in Changsha, Founder Securities told the stock exchange that day.

Shares of the firm closed 3.1 percent lower in Shanghai, taking its two-day slump to 7 percent. The stock more than doubled in November and December. China Hi-Tech added 0.6 percent today.