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Shares of troubled China tech firm tumble
A TROUBLED Chinese tech company dropped by the daily maximum on Friday as trading resumed for the first time in more than 900 days.
Beijing Xinwei Technology Group Co fell by the 5 per cent limit placed on Chinese equities with risk tags. The Shanghai-listed stock has lost 147.5 billion yuan (S$29.2 billion) in value since reaching a record high in June 2015.
Trading of Xinwei's shares was halted after a report by news website NetEase questioned its business and said it might have concealed relationships with partners operating in Myanmar. The company said at the time that the report was "severely inconsistent with reality".
In 2017, Xinwei said it faced pressure over debt repayment. That year also saw the Beijing-headquartered company's attempts to acquire Israel's Space Communication Ltd and British aerospace parts maker Doncasters Group Ltd fall through. The stock was removed from the SSE 50 Index of some of China's largest firms in November 2017.
"It has become very difficult to tell what is real and what is not for this company," said Niu Chunbao, managing director at Shanghai Wanji Asset Management Co. "It is now among the pile of companies known for fraud and not worthwhile for further research."
Chinese investors have been rattled by scandals at other companies this year. Kangmei Pharmaceutical Co said in May it overstated its cash holdings by 29.9 billion yuan after using false documents and transaction records.
Regulators said last week that Kangde Xin Composite Material Group Co fabricated 11.9 billion yuan of profits during the 2015-2018 period. Trading in Kangde Xin's shares was halted this week in Shenzhen.
Xinwei chairman Wang Jing abandoned his office in Hong Kong island's tallest skyscraper, International Finance Centre, in April last year.
In 2013, Mr Wang signed a US$50 billion deal with Nicaragua's government to build a rival to the Panama Canal linking the Atlantic and Pacific oceans. BLOOMBERG