Billionaire Loses Half of Their Fortune After Stock Price Suddenly Collapses

A Hong Kong billionaire has lost half of her wealth after her company announced that Chinese authorities were investigating her over "suspected disciplinary violations."

Share value in Huabao International Holdings, a leading e-cigarette flavor maker, plunged about 67 percent after a filing from the flavoring and fragrances company was released announcing the probe.

The Hong Kong-listed firm did not elaborate on details, but said Chu Lam Yiu, its chairwoman, chief executive officer and controlling shareholder is being investigated by a supervisory committee for Leiyang, a city in China's Hunan province.

According to the company, Chu controls 71 percent of its shares, Bloomberg reported.

"Up to the date of this announcement, the Company has not been provided with any details of the nature of the suspected violations of Ms. Chu that is currently being investigated. The business operation of the Group remains normal," the filing said.

"Further announcement(s) will be made to keep the shareholders of the Company and the public informed of the development in this matter in due course," the filing added. "Shareholders of the Company and the public are advised to exercise caution when trading in the shares of the Company."

The filing was signed by the company's executive director and vice president, Poon Chiu Kwok.

According to the Bloomberg Billionaires Index, her net worth plunged from $5.5 billion on Friday to $2.6 billion following the release of the company filing.

Chu, who has Hong Kong citizenship, was born in China's Sichuan province and founded Huabao International Holdings' predecessor in 1996. The firm was listed in 2006 following a reverse merger.

"Ms. Chu is experienced in formulating strategies and making executive decisions on business operation, investments and market development," her bio on the company website reads, noting that she has served as a board member since March 2004.

The investigation comes as Chinese authorities crackdown on the e-cigarette industry. In August, shares in Huabao International Holdings slid 8 percent after state media Xinhua reported an expert as saying that a tougher crackdown was needed to prevent minors from illegally purchasing e-cigarettes.

"E-cigarettes pose a safety hazard to minors, and further efforts should be made to crack down on the sale of e-cigarettes to minors," the media outlet quoted Fu Jia, director of Tianjin Lawyers Association's professional committee for the protection of minors, as saying.

Minors have been prohibited from purchasing e-cigarettes since 2018. Online sales of the products have also been banned since 2019.

Chu's company also produces fragrances, aroma raw materials, tobacco raw materials and ingredients and condiments.

Victoria Harbour Hong Kong
Two friends chat in front of a view of Victoria Harbour and a light display (back C) commemorating the 20th anniversary of the city's handover from British to Chinese rule in Hong Kong on June 27, 2017, ahead of the handover anniversary on July 1. A Hong Kong billionaire and chairwoman lost half of her wealth on Monday after her company announced that Chinese authorities were investigating her over "suspected disciplinary violations.” ANTHONY WALLACE/AFP/Getty Images