SouthGobi CEO Arrested as Concern Over Hong Kong's Stocks Rises
Mongolian coal producer SouthGobi Resources’s CEO was detained in China as a suspect in a fraudulent loan case.
(Bloomberg) -- Mongolian coal producer SouthGobi Resources Ltd.’s CEO was detained in China as a suspect in a fraudulent loan case, the latest Hong Kong-listed company linked to allegations of misconduct.
SouthGobi shares fell as much as 13.6 percent, the most in four months, to the lowest level in more than a year on the Hong Kong stock exchange. Aminbuhe Aminbuhe, who is also the firm’s chairman, was arrested on Oct. 11 and is being held at Rizhao City Detention Center, the company said in a statement on Friday. Bing Wang will be interim CEO in his absence.
The arrest coincides with rising concern over regulation of securities listed in Hong Kong. China Huishan Dairy Holdings Co. last week said its main units probably had a negative net worth, after its stock plunged 85 percent on a single day in March.
SouthGobi, which is also listed on the Toronto stock exchange, owns and operates the Ovoot Tolgoi metallurgical coal mine about 40 kilometers (25 miles) from the Shivee Khuren-Ceke crossing at the Mongolia-China border. It will initiate an internal investigation into the charges against Aminbuhe and any connection to the company, continuing normal business in the interim period, it said Friday.
Shares declined as much as 21 cents to $HK1.33, the biggest intraday drop since July 8 and the lowest since September 2016. They traded at $1.50 at 11:53 a.m. in Hong Kong and are down 13 percent this year.
To contact the reporter on this story: Ben Sharples in Hong Kong at bsharples@bloomberg.net.
To contact the editors responsible for this story: Aaron Clark at aclark27@bloomberg.net, Pratish Narayanan, Alexander Kwiatkowski
©2017 Bloomberg L.P.