Digital Domain Holdings Ltd. (00547.HK), an entertainment media and property investment group, has denied rumors about the company after its share price fell as much as 60 percent on Wednesday.
Managing director Zhu Xi dismissed media reports that an executive director of the company was under investigation by mainland regulators and that its announced joint venture with Canadian firm Immerse Media had foundered, the Hong Kong Economic Journal reported on Thursday.
According to media reports, Che feng, a son-in-law of former People’s Bank of China governor Dai Xianglong, has a stake in Digital Domain, and that Dai has been under investigation by the Chinese anti-graft body since January.
The stock had surged ninefold over the past two months following “buy” recommendations on www.gelonghui.com, a popular online forum on mainland stock markets.
It went up as high as HK$3.03, giving the company a market valuation of close to HK$30 billion.
But the shares suddenly plunged to an intraday low of 84 HK cents on Wednesday before closing 41.4 percent lower at HK$1.26.
The selloff came just days after a media report raised conflict-of-interest concerns about gelonghui.com whose founder is said to be a fund manager. Many other shares that were previously tipped by the website fell on Wednesday.
Zhu said the company’s operation remained stable, and its chairman and chief executive Amit Chopra was due to arrive in Hong Kong.
Translation by Vey Wong
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