QUNXING Paper Holdings Co., a mainland paper maker which has halted trading in Hong Kong since March 2011, said yesterday Hong Kong’s securities regulator searched its offices and won a court order to freeze assets.

    Hong Kong’s Securities and Futures Commission (SFC) is also seeking court orders to recover as much as HK$1.97 billion (US$254 million) in assets equal to funds the company raised through share sales and a warrant issue, Qunxing Paper said yesterday. The assets were frozen Dec. 12.

    The regulator last year negotiated with Hontex International Holdings Ltd. to compensate initial public offering (IPO) investors after saying the company made false statements in its prospectus.

    Qunxing, based in eastern China’s Shandong Province, raised HK$1.85 billion in its Hong Kong IPO in Oct. 2007.

    “The company has engaged a firm of solicitors in Hong Kong to provide legal advice and to act as its legal representative” in the proceedings, Qunxing Paper said.

    The SFC has alleged that the company breached the Securities and Futures Ordinance, and is asking it to buy back shares and unlisted warrants, Qunxing Paper said.

    The regulator seized documents including accounting and corporate records during the Dec. 12 search, Qunxing Paper said.

    The SFC had also obtained an injunction order on the same day from court prohibiting the company and its unit Best Known Group Ltd. from selling assets worth as much as HK$1.97 billion, the company said. (SD-Agencies)