BEIJING — BlueFocus has refuted a report that the Chinese communications group was linked to an insider trading penalty levied last year against Zhou Wenyuan, brother of the BlueFocus co-founder and chairman Oscar Zhou.

Local Chinese news site PR007 has retracted a story it published last week linking BlueFocus and Zhao to the penalty. The site has apologised to BlueFocus and Zhao.

A BlueFocus spokesperson confirmed to the Holmes Report that Zhou Wenyuan, Oscar Zhao's brother, was penalised for insider trading last year. According to China's Securities Regulatory Commission Zhao Wenyuan sold 90,000 shares of BlueFocus stock on 3 April 2015.

That transaction was later determined to be insider trading by the Commission. Accordingly, Zhao Wenyuan returned RMB¥391,130 (US$60,200) and was fined the same amount again as an adminstrative penalty.

"The Chinese authority has made it clear in the announcement that this whole affair was nothing related to [BlueFocus] nor the chairman of the group, Oscar Zhao, after the authority's close investigation," said a BlueFocus spokesperson.

After several years of eye-catching growth, fuelled by acquisition, BlueFocus last week revealed that profits had dropped by more than 50% in 2015. Of note, the company blamed "long-term asset depreciation" at three of its new subsidiaries — Bojie, Kingo, and We Are Social, "which eventually left a huge impact on the profit."

Last year, meanwhile, trading in BlueFocus shares was temporarily suspended on the Shenzhen Stock Exchange.