Hanergy boss Li Hejun had doubled short position over six months

The chairman of Hanergy Thin Film Power over the past six months more than doubled his short position on the solar energy's firm's Hong Kong-listed shares that crashed last week, regulatory filings reveal.

The build-up in short positions by Li Hejun coincided with significant share purchases, suggesting that the man who in February was named the mainland's richest may also have been hedging his bets on a stock whose meteoric rise over the past year had fuelled market speculation of a bubble.

That trajectory came to an abrupt halt on Wednesday when the stock plunged 47 per cent to HK$7.37 in just 70 minutes of trading before a suspension was announced. The share price had almost tripled this year. The filing to the stock exchanged cited the pending release of inside information on the company.

Robert Halili, the chairman of financial data provider Asia Insider, notes that Li - who saw his fortune shrink by HK$100 billion in the sell-off, along with the loss of the Hurun rich list crown - last made a declared purchase of Hanergy shares from May 11 to 18 at an average of HK$7.26 each for 28.4 million shares.

Halili, a columnist for the South China Morning Post, says regulatory filings show that Li had increased his short position by 123 per cent since late December last year to 7.71 per cent of Hanergy's issued capital.

The filings showed that Li's short position had stood at 2.42 billion shares or 5.81 per cent of the issued capital from late December until May 17, Halili said. Last Monday, Li raised this position by 796 million shares. This meant his short position by the time of the trading halt had ballooned to 3.217 billion shares, or 7.71 per cent of the issued capital.