Hanergy shares must remain suspended, orders Hong Kong regulator

Troubled Chinese solar company Hanergy has been told by Hong Kong’s stock regulators that trading in its shares cannot resume without the watchdog’s prior approval, casting further doubt as to whether the company will ever begin trading again.

In May, Hong Kong’s Securities and Futures Commission (SFC) carried out an investigation into Hanergy’s stock market performance following a precipitous 47% collapse in its share price in the space of one hour earlier that month. That collapse wiped around $19 billion from the company’s market value.

This all led to Hanergy requesting share trading be halted on May 20, and today’s unusual decision by the SFC to uphold and extend the trading ban means that Hanergy shares may remain suspended for the foreseeable future.

Speaking to pv magazine at the time of Hanergy’s share price crash and subsequent trading suspension in May, Bloomberg New Energy Finance (BNEF) lead solar analyst Jenny Chase prophetically remarked: "I am curious as to when this company will begin trading again, if ever."

A solicitor who has previously worked on criminal SFC prosecution cases told Bloomberg that this extension of Hanergy’s share trading is likely the first step in "what will become a criminal prosecution". Eric Seto, of Morley, Chow, Seto Solicitors added that the step from SFC is highly unusual and, if Hanergy is found guilty of submitting misleading share information, the SFC could fine Hanergy chairman Li Hejun as much as $130,000, or even impose a prison sentence.

The FTSE followed up the SFC’s decision by announcing today that it is to drop Hanergy from its FTSE China 50 index as of July 20. Hanergy will also be removed from other FTSE indexes.

The SFC can halt share trading if it decides that "any material false, incomplete or misleading information" has been handed over in documents issued by a company. The ruling means that Hanergy cannot resume share trading even if it requests to do so.

The July edition of pv magazine delves into the Hanergy story, examining the company’s history in the solar industry and subsequent attempts by various financial reporters to make sense of its unprecedented rise and subsequent fall.