(Yicai) May 13 -- Shares of Ri Ying Holdings plunged after the guarantor of insolvent Chinese private equity firm Ruifengda Asset Manager absconded from investors after stumbling in a repayment crisis.

Ri Ying’s shares [HKG: 1741] were trading down 57.6 percent at 11 Hong Kong cents (1.4 US cent) as of 3.25 p.m. in Hong Kong today, after earlier plunging as much as 60 percent.

Ruifengda’s office in Shanghai was empty, an investor told Yicai after going to check on-site on May 10 because they heard the company had absconded.

Yicai also visited the office and found it empty. The investors who spoke with Yicai claimed they had purchased millions to tens of millions of Chinese yuan in fund products from Ruifengda, which are now unredeemable.

Ri Ying is the investment institution guaranteeing for Ruifengda’s products. Moreover, Li Tao, the legal representative of Ruifengda, is a former employee at Ri Ying. The two companies share the same office in Shanghai, according to some media reports.

Founded in 2016, Ruifengda manages funds worth a total of CNY2 billion to CNY5 billion (USD276.5 million to USD691.1 million), according to data from the Asset Management Association of China. Its registered capital is CNY30 million (USD4.1 million), but its paid-up capital is only CNY7.5 million (USD1 million). It has only 12 employees.

Ruifengda’s shareholder structure and senior management changed several times. Its current shareholders are Hainan Smart City Holding Group and Shanghai Qingcheng Culture Club, with stakes of 51 percent and 49 percent, respectively.

Li is also Ruifengda’s executive director and general manager. However, he transferred all its shares of Smart City last month, according to corporate information platform Tianyancha.

Ruifengda is keen on speculating on small-cap companies with poor liquidity on the National Equities Exchange and Quotations, Yicai learned from an industry insider. The company often leveraged in most offerings, so some of its products achieved very high returns, the insider noted.

Editors: Dou Shicong, Futura Costaglione