Mystery $50 billion Chinese medical fortune collapses in days
When Yat-Gai Au was worth $US33 billion ($50 billion) on paper, he wasn't in his Hong Kong office.
One week later, when his net worth plunged to $US10.1 billion, he wasn't around either.
Officers at the headquarters of Regencell Bioscience Holdings said both times that Au made only short visits there, before turning away reporters. The firm, a NASDAQ-listed, Cayman Islands-incorporated traditional Chinese medicine company, occupies the whole ninth floor of a tower in Hong Kong's bustling Causeway Bay, including a reception area with a large table tennis table.
Little is still known about the tiny, money-losing company whose shares exploded 82,000 per cent higher and suddenly made Au, its chief executive officer with an 86 per cent stake, richer on paper than some of the city's tycoons like Li Ka-shing. The fleeting nature of its rip-roaring rally has captivated and mystified observers from the US to Hong Kong. Morning Brew, a popular business account on X, flagged its stock move and wondered: 'Is there something I'm missing?'
Regulators in the US, which closely monitor wild swings in stock prices, might soon be asking the same question, according to experts.
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The Financial Industry Regulatory Authority, the watchdog for broker-dealers, has repeatedly said small, cheap stocks are more susceptible to fraud. These companies can be targets for pump-and-dump schemes in which frauds inflate the stock price and quickly sell their shares.
The US Securities and Exchange Commission, meanwhile, has been increasingly wary about companies listed on US exchanges that are based overseas, and Regencell checks both boxes. The regulator on June 4 called on the public to weigh in on whether the agency needed to amend the definition of what's called a foreign private issuer, potentially limiting the number of companies that qualify for special status that lets them avoid filing quarterly financial reports or disclosing when executives buy or sell company shares.
'This is an example of very unusual movements in share prices,' said Richard Harris, founder and chief executive of Port Shelter Investment Management in Hong Kong. 'These movements could certainly trigger interest by investigators.'
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