Agile Property says report linking it to Zhou Yongkang is untrue

Agile Property Holdings, the Chinese developer that halted its stock trading last week, said an online report linking it to former Chinese security chief Zhou Yongkang was groundless and untrue.

The Chinese website article's claim that Zhou, who is under a corruption probe, is a substantial shareholder of Agile is false, the company said in a statement posted on its website. Allegations that Agile assisted in money laundering and Zhou had a close relationship with Chan Cheuk Yin, one of its directors, are fabricated, the statement said.

The company's 8.25 per cent perpetual bonds slid 7.3 cents on the dollar to a record low of 76.7 cents yesterday, according to Bloomberg-compiled prices. Shares in the builder, which is based in the southern province of Guangdong, dropped 40 per cent this year to HK$4.77 before they were suspended on October 3.

The report "has severely damaged the reputation" of the company and Chan, Agile said in the statement. It reserves the right to take legal action, it said.

Agile has not yet issued a statement to the Hong Kong stock exchange regarding the allegations nor has it said when its shares will resume trading.

"We think it is likely that suspension could be related to both shareholder structure and operation issues," Citigroup analysts including Manjesh Verma and Kenny Wu wrote in a note.