(May 25): A Chinese online brokerage tycoon lost more than a quarter of his fortune in a single day after Beijing cracked down on cross-border stock trading to tighten control over capital outflows.
The wealth of Leaf Li, the billionaire founder and CEO of Futu Holdings Ltd, slumped by US$1.7 billion to US$4.7 billion as of Friday, according to the Bloomberg Billionaires Index. That’s less than half the US$10.1 billion fortune he had at the end of October last year. The majority of his wealth is derived from his stake in Futu, which is listed in the US.
Shares of Futu plunged 28% on Friday, their biggest decline in more than three years.
The crackdown marks a dramatic reversal after Li’s company in March said it had been a beneficiary of Hong Kong’s boom in initial public offerings. Over half of IPO issuers in the city partnered with Futu, it said at the time.
Li is among a broader group of brokerage founders who amassed great wealth as China’s population began to invest in stocks. Futu, Tiger Brokers and Long Bridge Securities Ltd are among the firms that the nation’s securities regulator said it planned to penalise for operating on the mainland without a licence.
See also: China traders rush for exit after cross-border flow crackdown
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