The booming solar company that made its chairman one of China's richest men just imploded and shares tumbled 47%

Cooling tower demolition implosionREUTERS/Steve DipaolaThe 499-foot cooling tower at the Trojan Nuclear Plant is imploded in Rainier, Oregon May 21, 2006.

One of China’s most prominent companies saw its stocks absolutely torn to pieces today, following a suspicious boom story that saw the company’s chairman become one of the world’s richest man.

Shares in Hanergy, the enormous Chinese producer of thin-film solar power components, fell by as much as 47% before trading was suspended.

The shares had previously risen by more than 500% in the last year, so even such a colossal decline only takes the price back to where it was around the start of 2015.

Li Hejun, Hanergy’s chairman, had been in contention for the title of China’s richest man through his position, challenging Jack Ma, chief of Chinese e-commerce giant Alibaba.

Here’s how today’s plunge looks in context:

The Financial Times says that Li did not attend the company’s annual meeting on Wednesday

Hanergy’s public relations firm confirmed that Li Hejun, chairman and majority shareholder, did not attend Wednesday’s annual meeting in Hong Kong, although other senior executives, including Frank Dai Mingfang, chief executive, and Eddie Lam, finance director, did attend.

“Chairman Li did not attend the AGM,” said T.L. Chow, an external spokesman for Hanergy. “He had something to do.”

Mr Chow did not say where Mr Li might be, and Mr Li did not respond to request for comment.

An investigation from the FT earlier this year showed some extremely suspicious movements in the company’s share price. The huge surge in Hanergy’s stocks had been occurring almost exclusively in the last ten minutes of the trading day.

That meant that if you held the stock during its surge period, but only between market open and half an hour before the close (missing any gains made in the last half an hour) you actually would have lost money.

During the period of Hanergy’s rise there have been widespread concerns about overvalued Chinese companies. During the last year alone, the Shanghai Composite Index has more than doubled in value (though Hanergy is listed in Hong Kong).

The Wall Street Journal has also cast doubt on Hanergy’s model, suggesting that it “makes equipment to build niche kinds of solar panels that are either so inefficient that they have been abandoned by peers, or so new that the economics are untested.”

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