Source: Xinhuanet
04-05-2007 09:31
China's stock regulator again suspended the trading of Hangxiao Steel Structure Co. Ltd. Wednesday morning after feverish trading of the stock over the first two days of the week.
Trading of Hangxiao's shares on the Shanghai stock exchange was halted after share price soared 6.84 percent to 13.97 yuan (1.8 U.S. dollars) in the first minute of trading on Wednesday. Share prices jumped the allowable limit of 10 percent on both Monday and Tuesday.
An insider with the Shanghai Stock Exchange told Xinhua that the suspension was issued by the China Securities Regulatory Commission on Wednesday.
The insider said Hangxiao will provide a statement on Thursday notifying shareholders of the details of the investigation.
Hangxiao Steel Structure's stock trading was banned for 10 trading days beginning March 19, after it was accused of rigging stock prices by announcing it had landed an enormous contract in Africa. Its shares surged by the daily allowable limit of 10 percent for 10 straight days ending March 16, when it closed at 10.75 yuan (1.38 U.S. dollars).
The company announced on March 13 that it had signed a construction contract in Angola worth 34.4 billion yuan (4.45 billion U.S. dollars), which would greatly boost its business.
The two-year contracts first aroused suspicion in the steel sector, where experts claimed it involved 3.3 million tons of steel.
Experts said Hangxiao Steel Structure produced structures using only 300,000 tons of steel in 2006.
The company defended its handling of the announcement of the contract. The company said its plant had a total production capacity of 680,000 tons and the contract allowed it to arrange for subcontracts.
The company is also accused of insider trading by disclosing information to staff contrary to disclosure rules.
An official with the company, who spoke on condition of anonymity, told Xinhua that board chairman Shan Yinmu addressed the firm's annual conference on Feb. 12, saying the company's sales were expected to surge to 12 billion yuan (1.55 billion U.S. dollars).
The China Securities Regulatory Commission has not yet ruled on whether the company has violated any rules.
Hangxiao, based in Xiaoshan Economic Development District of Hangzhou, has a registered capital of 248 million yuan (32 million U.S. dollars) and was listed at Shanghai Stock Exchange in November 2003.
Editor:Li Yang
