The investigation into the unusual share trading of Hanergy Thin Film Power will be a test of cross-border regulation as much of the trading came from mainland investors, who are out of the SFC’s reach.
The company suspended trading of its shares from May 20 after its share price plunged 47 per cent in just 70 minutes of trading, diving to HK$3.91 from the previous day’s close of HK$7.37.
The shares experienced big swings before the suspension and had risen 664 per cent in the 12 months before the sell-off. In a rare move, the Securities and Futures Commission went public last week with an announcement that it was investigating share trading in Hanergy, just hours after Hanergy chairman Li Hejun, speaking to mainland media, denied any such probe was under way.
It is good to learn the SFC is doing its job but we do not how far it can go as much of the trading came from north of the border.
According to stock exchange data, Hanergy was the stock most traded by mainlanders via the Shanghai-Hong Kong Stock Connect scheme in February and March.
In March, mainlanders traded a total of HK$4.96 billion in Hanergy shares via the scheme’s southbound route.