A 93 per cent share price fall or loss of $1.8 billion of market capitalisation is ugly whichever way you look at it. But as shareholders in Far East Pharmaceutical Technology examine their near-worthless scrip, they might be asking how it came to this.
Bad things do happen - this time a company chairman going temporarily AWOL - but it is the reaction to the problem that determines its magnitude. If Hong Kong had any pretensions to running a mature equity market, it was dealt a blow by the rumour-ridden and margin-driven sell-down in this mid-cap drug and vitamin maker.
Investors need to know if this was a one-off, or if other privately owned China shares could succumb to the same fate.
The trigger on the surface was merely an inability to contact chairman Cai Chongzhen. Even speculation that Mr Cai was in trouble with officialdom, rather than recuperating in hospital, would have been less troubling were he not the majority owner of Far East Pharmaceuticals and effective guarantor of its bank loans.
While other organisations rely heavily on one key figure, such as Rupert Murdoch at News Corp or Jack Walsh at General Electric, the big difference is the chairman was not just providing leadership or strategic direction but also guaranteeing the firm's financial viability. If Mr Cai leaves or sells his holding, loan covenants dictate the company's financial lines must end.
The bankers' preoccupation with the chairman directly stems from a concern that unforeseen activities from his private life impinge on his public life. The company's latest published accounts showing $612 million cash in the bank and almost $300 million net of loans give little warning of impending disaster.