Jan. 8 (Bloomberg) -- Agile Property Holdings Ltd., the Chinese developer in which JPMorgan Chase & Co. owns a stake, had its biggest drop in almost a year in Hong Kong trading after founder and chairman Chen Zhuo Lin was formally charged with indecent assault.
Agile declined 6.5 percent to HK$11.86 at the local close, its biggest drop since Feb. 13. It earlier fell as much as 7.4 percent.
The arrest is unrelated to the business of the group and will not affect operations, the developer said in a statement to the Hong Kong stock exchange today. The company, based in the southern Chinese city of Guangzhou, will make a further announcement when appropriate, according to the statement.
The company will have to name a “major decision-maker” and clarify its business plans if Chen ceases to be the chairman, said Danielle Wang, an analyst at DBS Vickers Hong Kong.
“Agile’s share price will be under short-term pressure,” said Wang, who maintained her hold rating on the shares. “The stock is fairly valued in the long term.”
Chen was arrested by police in Hong Kong in August in connection with an allegation of indecent assault and now faces two counts, according to Agile.
Chen is accused of two counts of indecent assault that occurred last year in Hong Kong, according to charges read out at the Hong Kong Eastern Magistrate’s Court today. The case was adjourned until Feb. 19 and Chen, who attended today’s hearing, had his bail terms extended.
Chen and his wife Luk Sin Fong hold 2.19 billion shares, or 63.58 percent in Agile, worth $3.3 billion, according to data compiled by Bloomberg. Luk is the company’s vice chairman and co-president.
JPMorgan, with 4.83 percent of the company, is the second-biggest shareholder after Chen’s family, according to data compiled by Bloomberg.
To contact the editor responsible for this story: Andreea Papuc at email@example.com