Hanergy taken off connect list

Solar panel company loses its spot in the latest twist to its stock market problems

Hanergy Thin Film Power Group Ltd has been removed from Shanghai-Hong Kong Stock Connect pending an investigation by the Hong Kong regulators.

The move followed the decision by Hong Kong's Securities and Futures Commission to suspend trading in the Chinese solar panel company on July 15.

Hanergy had earlier asked for its shares to be suspended from trading in Hong Kong on May 20 after its stock price plunged by 50 percent, wiping off almost half of the company's $21 billion within just half an hour.

The SFC later took the unprecedented move of making public the fact it was investigating the company after its chairman, Li Hejun, denied it was under the scrutiny of the Hong Kong regulator during a media interview.

Since then, the FTSE in London has decided to remove Hanergy from three of its indexes, including the FTSE China 50 Index and the FTSE Hong Kong Index.

This latest development to remove the company from Shanghai-Hong Kong Stock Connect has been backed by market professionals.

Hanna Li Wai-han, a strategist at UOB Kay Hian (Hong Kong) Ltd, said the decision would meet market expectations about Hanergy.

She added that the market had remained skeptical about the company's gross profit for quite a while. At one point, Hanergy was one of the star H shares on the Hang Seng.

The parent company Hanergy Group Holding Ltd has a 73-percent stake in the listed subsidiary. Its interim financial report last year showed that a staggering 98.7 percent of the company's revenues came from the sales of products to its mainland parent company, a business model long been criticized by the market and being investigated by the SFC.

Hanergy has since canceled two deals with its parent and cut a number of connected transactions. But this latest decision to remove Hanergy Thin Film Power Group from the Shanghai-Hong Kong Stock Connect is yet a further twist in an ongoing stock market saga.