HONG KONG -- Hong Kong's Securities and Futures Commission has ordered the city's stock exchange to extend a trading suspension imposed at the behest of Hanergy Thin Film Power Group, a Chinese solar cell manufacturer under investigation by the regulator for undisclosed reasons.
Trading of Hanergy shares has been halted since May 20. The company requested the stoppage after its stock plunged 47%, from 7.37 Hong Kong dollars to HK$3.91, on the morning of its annual shareholders meeting. The fall took less than half an hour and demolished about $19 billion of market capitalization.
The commission on May 28 announced that it was investigating Hanergy's affairs, without elaborating. Media reports have said the probe concerns alleged market manipulation.
Reuters on Wednesday reported that Hanergy's management was hoping to resume trading and was in talks with the bourse, citing an anonymous source. Earlier, it reported that the stock exchange had asked the solar cell maker to turn over the books of its unlisted Chinese parent, as a condition for a resumption. Hanergy apparently declined.
The regulator is empowered to suspend trading when it believes a company has provided materially false, incomplete or misleading information in an announcement or document pertaining to its shares or operations.
Meanwhile, FTSE Russell, a global financial market index compiler, said Wednesday that it will drop Hanergy from its FTSE China 50 Index, Hong Kong Index and Hong Kong ex H Shares Index on July 20, citing the formal suspension.
Hanergy's parent, Hanergy Holding Group, said May 21 that the group's operations were normal in all respects and that it "has full confidence in the development of Hanergy Thin Film." The parent also stressed that it had never used its shares for financial derivatives transactions or placing bets with individuals or institutions.
A year ago, Hanergy Thin Film's shares were trading at around HK$1.2. A surge to HK$9.07 in March made Chairman Li Hejun, who holds a majority stake, one of China's richest individuals.