Huis­han Dairy shares fall 90pc in sud­den sell-off

New Straits Times - - Business -

HONG KONG: Shares in China Huis­han Dairy Hold­ings plunged more than 90 per cent yes­ter­day, wip­ing off around US$4 bil­lion (RM17.7 bil­lion) of its mar­ket value be­fore trade was halted.

It was not im­me­di­ately clear what trig­gered the slide.

In De­cem­ber, United States firm Muddy Wa­ters ques­tioned the firm’s prof­its and said it had in­flated spend­ing on its cat­tle farms to ar­ti­fi­cially raise cap­i­tal ex­pen­di­ture fig­ures.

Muddy Wa­ters said at the time it be­lieved the Chi­nese dairy firm to be worth “close to zero” be­cause it had mis­rep­re­sented its self-suf­fi­ciency on al­falfa used as feed for cat­tle, was over-lever­aged and over­stated its spend­ing.

China Huis­han had said the al­le­ga­tions were ground­less.

Yes­ter­day, the firm’s trad­ing vol­ume soared to 779 mil­lion shares with the bulk of the sell­off oc­cur­ring in the last 20 min­utes of trade be­fore mid­day.

The shares fell to HK$0.25 (14 sen) be­fore ris­ing to HK$0.42 when the trade was halted.

China Huis­han chair­man Yang Kai con­trols the com­pany through Champ Har­vest, which owns 72 per cent of the firm.

Champ Har­vest has a HK$2.4 bil­lion bank­ing fa­cil­ity with Ping An Bank, which is se­cured by stock held by the con­trol­ling share­holder. Reuters

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