Shares of Fujian-based Far East Pharmaceutical Technology, which resumed trading yesterday after a four-year suspension following its bizarre crash, plunged 76.77 per cent to 15.8 HK cents, though this was within the expectation of analysts. 'This is not a surprise because some fund houses were still holding the shares before the company suspended trading,' said a European investment bank analyst who asked not to be identified. 'Those fund houses would immediately sell off their shares after Far East was able to resume trading.' According to a statement Far East posted on the Hong Kong stock exchange yesterday, the company had finished placing 726.24 million shares to at least six investors. Each now holds less than 5 per cent of the enlarged share capital. The company did not disclose the price for placement and the percentage of its enlarged share capital. But it said that Far East had sufficient public float for trade resumption. In June 2004, Far East Pharmaceutical chairman Cai Chongzhen abruptly departed. Initially, the company's explanation was health reasons but that was abruptly changed overnight to a 'business trip'. The drug firm's share price then fell more than 90 per cent on rumours of his apparent disappearance. Mr Cai's sudden sale of Far East stock was believed to have been compelled by a margin call. Creditors behind a US$80 million syndicated loan to the company moved in with winding-up petitions and it emerged that a large hole had appeared in Far East's balance sheet where there had once been $600 million in cash. The company's market capitalisation shrank to HK$100 million from HK$1.9 billion after its shares slumped. Shares of Far East closed at 68 HK cents before it suspended trading. Far East could not resume trading in the past four years because the company was not able to submit a valid resumption proposal, according to the statement posted by the stock exchange. Since 2004, Far East, which makes drugs for colds, high blood pressure and diabetes, has posted four consecutive years of net losses. The company said its net loss widened to HK$64.15 million last year from HK$52.95 million in 2006. Far East previously had invested HK$30 million to build a drug plant in Fuzhou. It is expected that the plant will expand the company's present output value of about HK$400 million by eight to 10 times.