(Yicai Global) Aug. 9 -- Shares of Huatie Emergency Equipment Science & Technology plunged after the chief of former ally Ebang International Holdings accused the head of the construction equipment leasing company of large-scale embezzlement.

Huatie [SHA: 603300] opened at CNY10.3 (USD1.60), down by the daily limit of 10 percent. The sum is the lowest since June. Its market value was about CNY9.3 billion (USD1.4 billion). 

Hu Dong, chairman of Bitcoin mining rig maker Ebang, said yesterday that Huatie has engaged in serious financial fraud and that its actual controller Hu Danfeng, as well as his spouse Pan Qian, have misappropriated the company's assets, Securities Daily reported.

Huatie denied all of Hu's allegations in a statement today.

Grudges 

The two firms that are both based in Hangzhou have been at loggerheads over a failed deal that was initiated in 2018. Ebang was supposed to sell 80,000 Bitcoin mining machines to Huatie for CNY403 million (USD62.2 million) but not all of them were delivered nor paid for.

Late last year, Ebang's unit filed a lawsuit against the buyer regarding the deal. A court in Hangzhou has already heard the case, according to Huatie’s statement.

Due to the suit, some of Huatie's assets have been frozen since March but the firm only told about it on Aug. 3, according to the same news report. After that, Huatie's stock price has slumped by a fifth. 

The amount of restricted assets is CNY33 million (USD5.1 million), accounting for less than 1 percent of Huatie’s net assets, so it should not have a significant impact on the company's daily operations, according to the firm.

Ebang's Nasdaq-listed shares [NASDAQ: EBON] were 8.2 percent up in pre-market trading after rising 6.2 percent to USD2.60 yesterday.

Editor: Emmi Laine