A shareholder of Real Gold Mining Ltd., a Chinese gold producer halted from trading for the past year after allegations of financial discrepancies, sold shares off market at an 84 percent discount.
Cheah Co. cut its stake to 8.5 percent from 9.4 percent after selling 7.9 million shares at an average price of HK$1.40 each, according to a filing to the Hong Kong stock exchange yesterday. That compares to the last traded price of HK$8.86 on May 27, 2011, before the shares were suspended. Cheah is the controlling shareholder of Value Partners Group Ltd., a Hong Kong-based asset manager.
Regulators and investors have increased scrutiny of Chinese companies after earnings delays and accounting disputes. Real Gold is seeking to address a South China Morning Post newspaper report that said the company may have filed two different sets of accounts.
“The sale was due to normal fund redemption,” Anne Lui, a spokeswoman for Value Partners, said by phone. The fund sold the shares in the over-the-counter market and has no intention to reduce its stake further at the moment, she said.
The asset manager is the third-biggest shareholder of Real Gold, according to data compiled by Bloomberg. The identity of the buyer wasn’t disclosed.
Real Gold must conduct an independent forensic accounting investigation and publish all financial results outstanding before it can resume trading, the company said in March, citing a letter received from the stock exchange.