A HONG KONG company, identified as part of a network of penny-stock firms whose share prices crashed massively in June, said Tuesday it had initiated legal action against 28 defendants for causing the firm substantial financial loss and damage.

The writ by Convoy Global Holdings Ltd. was filed in Hong Kong’s High Court more than a week after Convoy appointed new senior officials to the company following the arrest by Hong Kong’s anti-graft agency of three of its executive directors.

In the writ, Convoy said it was seeking unspecified damages, claiming the defendants were involved in a “gross breach of fudiciary duty and illegitimate diversion of the company’s funds” in relation to share placements in 2015 that raised HK$4.5 billion (US$587 million).

Convoy was featured in May by independent investor David Webb in a group dubbed the “Enigma Network.”

Several Enigma stocks plunged within minutes of each other June 28 for no apparent reason, erasing more than US$6 billion in market capitalization in a single day. Many shares lost more than half their value.

The defendants identified in the writ include officials from Convoy, other individuals and companies including China Green (Holdings) Ltd. as well as firms owned by Interactive Entertainment China Cultural Technology Investments Ltd., Jun Yang Financial Holdings Ltd. and Hong Kong Education (International) Investment Ltd.

It named Roy Cho, an executive director of Convoy, as the first defendant.

Earlier this month, Hong Kong’s Independent Commission Against Corruption conducted its first ever joint operation with the city’s markets’ watchdog, the Securities and Futures Commission, to arrest the three Convoy executive directors.

Wong Lee-man, Fong Sut-sam and Chan Lai-yee were suspended by Convoy following their arrests and were all named in the writ as defendants. (SD-Agencies)