Hong Kong regulator SFC orders loss-making medical firm to suspend trading
New Ray Medicine suspension the latest enforcement action to maintain market integrity after poor quality of some listings attracts short sellers
The SFC exercised its power under Rule 8(1) of the Securities and Futures (Stock Market Listing) Rules to direct the stock exchange of Hong Kong to suspend all trading of New Ray Medicine effective Friday morning, according to the company’s announcement filed with the stock exchange.
The SFC did not comment on its regulatory action on Friday.
Under the securities law, the commission directed the exchange to suspend all dealings in the company’s securities to protect investors and market integrity.
The SFC seldom issued such orders previously, but starting this year it has exercised these powers a number of times as part of a vow to step up enforcement against “scam shares” and other malpractices.
New Ray Medicine, a Zhejiang-based pharmaceutical company co-founded by 38-year old chairman Zhou Ling in 2001, listed on the city’s Growth Enterprise Market in 2013 and transferred to the main board in 2015.
The company issued a statement on Friday night, explaining that the SFC’s action was because the regulator had considered that several announcements made by the company in 2015 and 2016 “may have contained materially false, incomplete or misleading information”. The announcements involved the company’s acquisitions of a 50 per cent interest in Saike International Medical Group and a 15 per cent interest in Eternal Charm International.