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From Komfie Manalo, Opalesque Asia:

Hong Kong's Securities and Futures Commission (SFC) last week reported that it had began a formal investigation into the conduct of the closing auction session held last Monday (09-Mar-09) for shares in HSBC Holdings (HSBC).

The Chinese official media news agency Xinhua said the SFC had decided to pursue an investigation "given the significant public interest” on the issue.

In a statement posted on its website, the SFC said the probe would look into whether the closing price of HSBC on that date had been the result of any manipulation contrary to the Securities and Futures Ordinance, or whether any licensed person had breached the SFC’s Code of Conduct in distorting the market for the price of HSBC shares.

According to Xinhua, the price of HSBC's Hong Kong listed shares dived 13% from about HK$37.4 (US$4.96) to HK$33 (US$4.26) in Monday's last-minute closing auction session, shattering the benchmark Hang Seng Index. The benchmark Hang Seng Index plunged 24.14% to HK$33 (US$4.26) during the 10-minute closing auction that day.

At a press conference held Tuesday in Hong Kong, Sandy Flockhart, chief executive at HSBC Asia-Pacific cited “technical trading” as the reason behind Monday's drop in HSBC prices.

The bank also announced a rights issue of US$17.7bn, the largest-ever rights issue in Britain, among existing shareholders on Monday (09-Mar-09). The ban......................

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