HK freezes assets linked to 8,500% rally

HONG KONG • Hong Kong’s securities regulator ordered brokerages to freeze client assets linked to suspected market manipulation in shares of China Ding Yi Feng Holdings Ltd (DYF), the obscure investment firm whose mysterious 8,500% rally over the past ve years made it the best performer in MSCI Inc’s global stock index.

The city’s Securities and Futures Commission (SFC) has been investigating suspicious trading in DYF since mid-2018, it said in a statement on Wednesday, calling the company’s share price “irrationally high”. DYF was valued at around 95 times net assets, one of the most expensive levels worldwide, before the SFC suspended the stock and searched the company’s offices earlier this month.

The SFC, which didn’t name any owners of the frozen assets, said it’s not investigating the brokerages. As a group they hold about 38% of DYF’s issued shares, according to data compiled by Hong Kong’s stock exchange. Jonathan Li, a spokesman for the SFC, declined to comment further. A DYF representative said the company will cooperate with regulators.

DYF had a market value of about US$3.6 billion (RM14.57 billion) before trading in the stock was frozen. — Bloomberg