Shares in Asian Citrus Holdings Limited fell 64 per cent in Hong Kong trading after the stock exchange claimed 'disorderly' transactions prompted it to suspend the Chinese firm on its 26 November debut.
Share prices initially jumped eight-fold then fell by around 60 per cent.
Asian Citrus shares closed at HK$7.10 on the city's stock exchange, after being suspended at HK$19.94.
The root of the problem seems to lie with information printed in Asian Citrus Holding's prospectus being misunderstood by the Hong Kong exchange.
Shareholder activist David Webb told Bloomberg.com trading information displayed by the Hong Kong exchange's computers misled investors because the data failed to reflect a 10-for-1 split in Asian Citrus stock in London.
Asian Citrus opened at US$6.61 on 26 November in Hong Kong, nearly 10 times the 25 November closing price of US$0.75 for the London-traded shares.
Asian Citrus claimed their 23 November prospectus contained information about the stock split, but a spokesman for the Hong Kong exchange said they have made no mistake and took information from the company's prospectus as of June 30.
In spite of calls to cancel the transactions of some 12m Asian Citrus shares traded on Thursday, the Hong Kong exchange has said it will not do so.
Mr Webb said Asian Citrus is ultimately responsible for the accuracy of its prospectus but added the Hong Kong exchange should have spotted the problem.
According to its listing prospectus, the company's net tangible asset value per share on 30 June was US$5.46. Mr Webb claimed that by displaying that figure on their computers, the Hong Kong exchange may he have led some to believe that their investment was backed by ten times more assets than it actually was.
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