Investors dump Euro-Asia as SFC looks into dealings

PUBLISHED : Friday, 27 September, 2002, 12:00am
UPDATED : Friday, 27 September, 2002, 12:00am

Shares in mainland private enterprise Euro-Asia Agriculture (Holdings) plunged 27.41 per cent yesterday when trading was resumed following a four-day suspension.

Bucking the upside of the general market, the share dived 17 HK cents to 45 HK cents from 62 HK cents when it last traded before the suspension.

The counter has lost 83.92 per cent from the HK$2.80 peak in June.

Yesterday also saw a heavy trading volume of 218.86 million shares, equivalent to 13 per cent of issued shares. The volume was even higher than the 151 million shares traded on Tuesday last week, which drew comment from the Securities and Futures Commission (SFC).

Two days later, the watchdog took the unusual step of suspending trade until yesterday morning. Trading resumed after the firm disclosed that its chief executive had resigned, information which the commission regards as price-sensitive.

Former chief executive Chen Jun tendered his resignation on September 12 but the board only approved his resignation on Sunday.

The SFC said the resignation should have been immediately announced although Euro-Asia's management believed it should only be revealed after the board's acceptance.

The commission also told Euro-Asia that it had commenced an inquiry into trading in shares of the company.

Uncertainty arising from Euro-Asia chairman Yang Bin's appointment as head of a special administrative region in North Korea also weighed on Euro-Asia's share price.

Considering the uncertainties, some analysts warned investors to stay out of the shares.

Mansion House Securities yesterday said: 'Although the valuation of the counter seems to be attractive . . . we believe that institutional investors have generally lost their confidence in the counter.'

Mansion House put an 'avoid' recommendation on the share.