Hong Kong traded shares in Chinese peer-to-peer lending platform Gold-Finance tank after founder put in police custody
- Shares in Gold-Finance tumble by as much as 70 per cent in the city on Tuesday
China’s efforts to clean up its embattled peer-to-peer lending sector are behind the latest shock wave to affect trading in Hong Kong.
Shares in Gold-Finance Holdings, a Chinese wealth management firm, tumbled as much as 70 per cent in the city on Tuesday. The decline came after police in China’s eastern city of Hangzhou said over the weekend its owner, Wei Jie, was in custody for suspicious illegal fundraising.
The stock traded at 15.7 Hong Kong cents, slumping 67 per cent, before trading was suspended at 11.05am. Trading in the shares was also halted on Monday after media reports that Gold-Finance’s big shareholders and senior executives were being investigated by the police.
Gold-Finance has been unable to contact Wei, also its chairman, and director Xu Liyun since the weekend and will closely monitor any information about them, it said in a statement filed to the Hong Kong stock exchange on Monday night. The absence of Wei and Xu will have a materially adverse impact on the daily operations and financial position of the company, it said in the statement.
Gold-Finance was founded by Wei in 2008 and had assets worth more than 70 billion yuan (US$10.4 billion) under management in early 2018, according to its website. Its business scope ranges from financial product research and development to wealth management, as well as fund sales and services linked to high net worth clients, it said.