However, Hong added he expects these sales will only slow, not stop, stock price rises, in what's become a frenzied market.
China's benchmark stock indexes have surged nearly 150 percent over the past year, beating the rest of the world's major indexes, even as the country's economy slows.
Shenzhen's start-up board has more than tripled in the last 12 months and is now trading at earning multiples of 140, meaning at the current level of profitability, investors need to wait 140 years to recoup their investments.
Some shareholders are getting impatient.
Between June 1 and June 3, Jia Yueting, Chairman and president of Leshi, sold 35 million shares in the internet firm he founded, making 2.5 billion yuan (£257.8 million).
Leshi said on May 25 that Jia plans in total to sell up to 148 million shares over the next six months or 8 percent of the company, though he will remain the biggest shareholder after that with a 36.85 percent holding.
Read MoreThis could open the door to China's hot market
Leshi said that Jia will lend the proceeds of the sale to the company interest free. A spokeswoman declined to say whether the selling was prodded by a view that share prices are too high.
It's not just company management who are selling; major cornerstone investors, freed from mandated lock-up periods, are also reducing their stakes.
Cornerstone stakeholders slashed 109 billion yuan worth of China-listed shares in May, double the amount sold during the previous month, according to data from Southwest Securities.
That doesn't include 3.5 billion yuan worth of banking shares dumped by sovereign investment firm Central Huijin on May 26.
The reduction by Huijin, in its holdings in China Construction Bank (CCB) and Industrial and Commercial Bank of China (ICBC), represents a reversal of strategy by the state investor.
Huijin had been buying mainland-listed banking shares since the global financial crisis in 2008, in an apparent support to their share prices. Huijin confirmed in statement that it has sold the shares but did not provide its reasons for doing so.
Read MoreChinese farmers hope to harvest bumper stock profits
A similar trend was captured by an index compiled by Shenwan Hongyuan Securities that tracks major shareholders' trading activities. The index surged over the past month, to a record high, meaning major shareholders are reducing holdings at unprecedented levels.
"It a barometer of how people in the real economy view stock valuations," said Liu Junwei, analyst at Shenwan Hongyuan. "It means at the current level, a correction is very likely".