Chaoda Modern Agriculture (Holdings) lost more than a quarter of its market value yesterday following reports the mainland farming firm is being investigated by Hong Kong's Market Misconduct Tribunal.
The company, which in May was accused by Next Magazine of overstating the size of its land bank, halted trading in its shares yesterday afternoon without commenting on the inquiry.
A spokesman for the tribunal, to which cases are referred by the Securities and Futures Commission through the financial secretary, also declined to answer questions on what the investigation was about.
'The stock could be suffering due to lack of information from the Market Misconduct Tribunal or the company about what exactly is being investigated,' said Brook McConnell, the president of South Ocean Management, a Hong Kong-based fund manager that holds Chaoda shares.
Chaoda shares fell 26.7 per cent to close at an 81/2-year low of HK$1.10.
The firm, founded in Fujian province by Kwok Ho, the son of a People's Liberation Army officer, bills itself as the country's biggest vegetable producer. It has seen its market capitalisation shrivel 85 per cent since October last year to just HK$3.6 billion.