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Trading of Hanergy Thin Film Power Company shares (HKX:566) was halted today on the Hong Kong Exchange after the company’s share price plunged 47% within a span of just 24 minutes.
Who Is Hanergy?
“Hanergy Holding Group Ltd. is a multinational clean energy company as well as the world’s leading thin-film solar power company, committed to changing the world by clean power.
“Established in 1994, the company is headquartered in Beijing and has a total of 15,000 employees. It has branches in provinces all over China as well as in the Americas, Europe and the Middle East, Asia-Pacific, Africa and other regions, with core businesses covering hydropower, wind power and thin-film solar power. The market value of Hanergy Thin Film Power Group Limited, a listed company under Hanergy Holding Group Ltd., had surpassed HK$300 billion as of April 30, 2015. It ranks first among thin-film solar power enterprises worldwide in terms of market value, technology and size.”
According to Forbes, that valuation made Hanergy “the world’s biggest clean energy company” as well. Before 20 May 2015 the company ranked #1302 on Forbe’s Global 2000, but #291 in market valuation. That is a significant disparity, and it has alarmed a number of analysts and regulators for some time.
What Is Happening?
Frankly, no one seems to be sure how the company lost $18.6 billion (USD) of its prior $38.2 billion market value in less than half-an-hour. But there are some strange circumstances, serious questions, and a great deal of skepticism.
- Chairman and holder of 51% of the company’s outstanding shares, Li Hejun, failed to show up for the company’s annual shareholders’ meeting. Would it be too obvious to mention how highly unusual that is?
- Hanergy’s share price had grown by more than 600% since October 2014, a meteoric rise for any company.
- An independent study of the activity of Hanergy shares “demonstrated that the stock’s gains consistently came in the last 10 minutes before the close of trading each day in Hong Kong.
- Ironically, the issue of the stock’s collapse today comes on the heels of as yet unanswered questions about why the stock had increase so dramatically in the first place.
- Reuters has reported that “Hong Kong’s Securities and Futures Commission market manipulation in Hanergy’s share for several weeks.”
The Hang Seng Index was unaffected, as Hanergy is not a constituent.
