China’s Hanergy Thin Film Power Group (漢能薄膜發電集團) is under investigation by Hong Kong’s market watchdog, a source said yesterday, just hours after the company lost half its market value of nearly US$40 billion in 24 minutes.
Trade in the stock was suspended after the plunge, which left analysts just as puzzled about the sudden drop as they had been about a long run-up in the share price of the company, which manufactures solar panel-making equipment.
A source familiar with the situation later said the company, a unit of Beijing-based Hanergy Holding Group (漢能控股), had been under investigation for several weeks by Hong Kong’s Securities and Futures Commission for alleged market manipulation.
A spokesman for the commission declined to comment, and Hanergy officials were not available to comment when called at their Beijing offices.
Hanergy Thin Film Power Group, controlled by founder Li Hejun (李河君), said in a statement that trade had been suspended “pending release of an announcement containing inside information.”
Before the stock plunge, it had seen its value climb five-fold since September last year. At its share price peak in March it was worth US$48 billion, more than its nearest two dozen rivals combined and making Li one of China’s richest men — even as analysts and market watchers questioned the validity of some of its bullish proclamations.
The stock’s precipitous tumble came shortly after the beginning of the company’s annual general meeting in Hong Kong.
Li did not attend the meeting, and the company’s chief executive declined to comment on the share price plunge, according to local online media reports.
Li had attended an opening ceremony for a new company center in Beijing instead.
The 47 percent slide in the stock price left the company with a market value of US$21 billion.
More than 170 million Hanergy Thin Film Power Group shares were traded in the first hour of yesterday’s trading session, far more than its daily average over the past month, according to Thomson Reuters data.
The Hong Kong Stock Exchange declined to comment on the reason for the suspension, as did the commission.
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