A large sale of Euro-Asia Agricultural (Holdings) stock by two 'strategic investors' just weeks after they bought the stake is being investigated by the SAR market regulator as a possible breach of security laws.
The Securities & Futures Commission wants to know why Win Joy Investments and Win Share sold HK$273.75 million worth of Euro-Asia shares in August and September shortly before mainland authorities arrested the firm's chairman, Yang Bin, for alleged illegal business activities.
'Given the manner surrounding the sales, the commission is conducting an investigation into possible breaches of provisions of the Securities (Disclosure of Interests) Ordinance,' the firm said in statement requested by the commission last night.
On August 6, Mr Yang sold 300 million shares to the two investors at HK$1.35, giving each company an approximate 9 per cent stake in Euro-Asia.
However, Win Joy - ultimately owned by pro-Beijing businessman Ngan In Leng - sold its 150 million shares at an average price of $1.0508 per share on August 27, while Win Share - owned by Singaporean communications consultant Harvey Wee sold its 150 million shares between August 28 and September 17 at an average of HK$0.767 per share - far below the purchase price, according to SFC's findings.
In the announcement, the company did not comment on the recent allegation by the China Securities Regulatory Commission that the firm inflated its revenue by a factor of 20 in its Hong Kong listing application.
