Stock market Illustration: VCG

A whistleblower's revelation about alleged manipulation in the Chinese A-share market in recent days has led to a loss of about 35 billion yuan ($5.4 billion) in value on the Special Treatment (ST) board, according to media reports, prompting industry insiders to call for stricter regulation.

After Ye Fei, a manager at a private equity (PE) fund and an online influencer in the PE sector, alleged on May 9 that stock price manipulation by listed companies in the A-share market was taking place under the guise of "valuation management," share prices of companies he named have dropped sharply.

According to media reports, the market capitalization of 10 companies reportedly related to Ye had fallen by 6.4 billion yuan as of the close on Tuesday. Some of the companies have denied links with Ye.

These losses pushed down the ST board overall, with a decline of 4.68 percent on Tuesday, representing 35 billion yuan in total, according to a report from Sina Finance.

The ST board is composed of companies with poor financial performances, and their shares carry a regulatory warning about risks.

According to media reports, Ye was involved in some of the cases of stock manipulation as a middleman who brought funds and companies together to drive up share prices under the guise of valuation management.

Ye allegedly decided to expose such cases because one company refused to pay him a commission after its shares didn't reach the expected price.

The China Securities Regulatory Commission (CSRC) on Wednesday summoned Ye for a talk, CCTV reported, without providing further details.

Still, Ye's revelations have drawn widespread attention in China, including from regulators. 

TheCSRC has launched an investigation into the alleged market manipulation activities of some companies, including Jiangsu Lettall Electronics Co and ZOY Home Furnishing Corp, vowing that it would adopt a "zero tolerance" policy toward manipulation.

As the fallout of Ye's revelations continues, some have also raised questions about how investors should be compensated for losses caused by illegal activities carried out by the companies.

Kuang Yuqing, founder of Lens Company Research, told the Global Times on Wednesday that, after the CSRC's probe, companies that manipulated their stock prices would be held to account for investors' losses, and Ye, who was also involved in the processes, was also likely to be punished by regulators.

However, Kuang added that, even though regulators have increased the maximum fine for manipulation in recent years, the amounts sometimes don't cover investors' losses, so regulators should consider stricter measures to increase the cost of violating the laws. 

The CSRC has been stepping up crackdowns on illegal activities in the stock market, having issued 69 administrative penalty decisions and imposed fines of nearly 1.4 billion yuan for violations, the agency said.

According to data released by the regulator, fines for eight of the cases among the 69 exceeded 10 million yuan, while the fines in two cases exceeded 100 million yuan.