Xia contributed about RMB 300,000 ($47,100) to BYD in 1995, his first investment in BYD and making him one of the three founders of the company.
Reductions by executives of listed companies of their shareholdings are usually a concern for investors. For BYD, that concern has just been allayed.
The Shenzhen-listed new energy vehicle (NEV) maker announced today that its director Xia Zuoquan has completed the share reduction plan disclosed at the end of May.
The plan, first revealed by BYD on May 29, showed that Xia aims to reduce his holdings of up to 12 million BYD shares within six months, representing no more than 12.69 percent of his entire holdings and no more than 0.42 percent of BYD's total share capital at the time.
The price of BYD's shares traded in Shenzhen at the time the plan was announced was about RMB 180.
BYD's announcement today shows that Xia made 10 sales of his holdings between July 6-15 and December 10-16, thereby completing the reduction at a price range of RMB 233.05 per share to RMB 302.00 per share.
This means that Xia has cashed out at least RMB 2.8 billion through the share sale.
After this move, Xia holds about 23.64 million shares of BYD without any sale conditions and 70.93 million restricted shares, accounting for 2.839% of BYD's total share capital.
The reduction plan was due to Xia's personal financial needs and out of his strong confidence in the company's growth prospects, he declared that he will still hold BYD shares for a long time and will not reduce his holdings for three years from the completion date of this reduction plan, BYD's statement said.
BYD shares have continued to fall this week, with a cumulative drop of about 5 percent from Monday to Thursday. But they are up more than 60 percent since the announcement of Xia's plan to reduce its holdings.
As previously reported by Chinese media, Xia made his first investment in BYD in 1995 when he contributed about 300,000 yuan, making him one of the three founders of BYD.
Since then, he has increased his holdings in BYD's A and H shares. Xia joined BYD in 1997 and has served as an executive director, vice president and non-executive director of the company.
Xia has previously said that the purpose of the share reduction was to obtain funds to invest in an investment company that he founded.
Xia is the founder of Shenzhen Zhengxuan Investment Co.