Chinese Dairy Nearly Crashed Banks After Stocks Plunged
Amid rumors of fraud and false reporting, Chinese dairy company Huishan Dairy saw stock prices fall between 85-90% on Friday. The crashing stocks threatened the viability of banks associated with the business. The Hong Kong Exchange lost a record $4.1 billion as nearly 800 million shares changed hands in just four hours.
CNN reports that when pressed about the events leading up to Friday’s crash, the company says it has been unable to contact Ge Kun, who is in charge of the company’s finances, since March 21. She sent a letter to Yang Kai, the company’s chairman and controlling shareholder, who is also believed to be her husband, that recent work stress was taking a toll on her health. At that same time, Yang learned Huishan had failed to make some bank payments.
According to the Financial Times, reports that Ge had “misappropriated” US $436 million of funds have been denied by Huishan.