Shifang Holding Ltd. (01831.HK), which owns rights to the Ip Man 3 martial arts film, plunged after Chinese media reported the government is investigating whether the movie’s box office receipts have been artificially inflated via ticketing fraud, Bloomberg reports.
The stock tumbled 37 percent to close at HK$1.19, taking its losses this week to 67 percent.
Shares in the Fujian province-based company had surged almost 700 percent in the previous five months.
State news agency Xinhua reported this week the film industry watchdog is probing allegations of fraud after the movie, which stars Donnie Yen and Mike Tyson, raked in more than 500 million yuan (US$77 million) within four days after its debut.
The Xinhua report didn’t say where it got the information.
On Tuesday, Shifang said in a statement it doesn’t participate in the distribution or release of the film, adding that some online media reports about the movie’s box office results in China may have “greatly affected the reputation of the company”.
Shifang is entitled to 55 percent of the movie’s net box office income in China, according to the statement.
Late last month, the publishing and advertising company named Shi Jianxiang, producer of Ip Man 3, chairman. Days later, it issued a press release discussing the stock’s surge over the past few months.
Shi, 51, is also chairman of Shanghai Kuailu Investment Group Co. and served as a member of the Shanghai municipal committee of the Chinese People’s Political Consultative Conference, according to Shifang.
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