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Companies with links to China Huishan Dairy, including Ping An Bank, are clarifying those ties after the group’s shares suddenly plunged 90 per cent on Friday.

Huishan Dairy was granted a trading suspension after its shares suffered one of the biggest drops in the exchange’s history and wiped off some $4.1bn in market capitalisation.

On Monday Ping An clarified that Champ Harvest, a vehicle mostly owned by China Huishan’s chairman Yang Kai and which controls about 73.2 per cent of the company’s issued share capital, “pledged certain shares of Huishan Dairy as collateral” and had obtained credit lines from the bank in June 2015.

Ping An said that as of Friday, the outstanding borrowings of Champ Harvest with the Bank were HK$2.142bn, and the total number of Huishan Dairy shares pledged by Champ Harvest were 3.434bn.

It added: “At present, trading of the shares of Huishan Diary has been suspended and the Bank will take various measures to ensure the safety of the credit funds.”

The number of shares pledged to Ping An Bank represents about 35 per cent of those shares owned by Champ Harvest, and 26 per of the company’s shares in total.

Financial services company Far East Horizon, noting media reports about Huishan’s indebtedness, said in a separate statement to the HKEx that as of today it “has no account receivables under under finance lease(s) with Huishan Dairy Group nor does it have any other business relations with Huishan Diary Group.”

The company came under fire late last year from Muddy Waters, the hedge fund set up by short seller Carson Block, which issued a report saying the company looked on the verge of collapse due to excessive leverage.

According to Caixin, the Chinese news magazine, Huishan Dairy met with 23 of its creditor banks on Thursday afternoon to discuss its financial position.

As of pixel time on Monday, Huishan has yet to issue a new statement via the HKEx.

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