New | China Green suspends trading after being sued by Convoy as ‘Enigma Network’ fallout continues
Intrigue grows over the goings-on at 50 listed Hong Kong businesses with cross holdings in each other
China Green Holdings, named by stock commentator and activist investor David Webb in the so-called “Enigma Network” of 50 penny stocks trading in Hong Kong, suspended trading on Wednesday after the company was sued by Convoy Global Holdings in a legal action against 28 defendants for causing it substantial financial losses.
Webb issued the report on the network in May, identifying 50 listed businesses that he said had cross holdings in each other, including Convoy, and had approved loans and transactions, which did not make any commercial sense.
Many of the Enigma stocks crashed on June 27 abruptly, by between 20 per cent and 90 per cent. Convoy Global Holdings’ shares have been suspended since December 7.
China Green is named as one of the 28 defendants in a writ of summons filed by Convoy on Tuesday in Hong Kong’s High Court.
“The company (China Green) is currently seeking legal advice on the matter to assess the merits and implications (if any),” China Green said in a statement on Wednesday.
Suspension of its shares on Wednesday is pursuant to the rules and provisions of the stock exchange and the SFC.
