In an unusual move, stock market regulators in Hong Kong have asked a local court to help in the recovery of nearly 1 billion Hong Kong dollars ($129 million) in funds raised by mainland Chinese sportswear-fabric maker Hontex International Holdings Co. (HK:946 2.06, 0.00, 0.00%) , arguing the company gave misleading or false information during marketing in the run-up to its December initial public offering, according to reports Thursday.
The Securities and Futures Commissions said in a writ filed to the Hong Kong court that it wants investors in the company's shares to be paid back using the company's cash and other assets. It has asked the court to freeze Hontex's bank accounts and appoint a receiver to oversee the matter. Hontex shares were last quoted at 2.06 Hong Kong dollars, compared to their offer price of 2.15 Hong Kong dollars, before a trade-halt order was issued by the SFC ahead of the market open on Tuesday. The writ says Hontex violated some sections of an ordinance that covers fraud, deception and other misleading statements, without specifying exactly what the shortcomings were, according to reports.