The logo for the Apple Daily newspaper is displayed at the Next Digital Ltd. headquarters in Hong Kong, China, Aug 14, 2020. (PHOTO/BLOOMBERG)

HONG KONG - Hong Kong police arrested 15 people on Thursday on suspicion of manipulating the share price of media group Next Digital, whose stock soared in the wake of its founder Jimmy Lai Chee-ying’s arrest in August.

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The arrestees were charged with conspiracy to defraud and money laundering, police said.

The 15 suspects, including 14 men and one woman aged 22 to 53, allegedly communicated with via social media channels and repeatedly traded Next Digital shares after Lai was arrested.

Over the span of three days, the suspects, including a civil servant, bought and sold Next Digital shares more than 13,000 times and made a profit of HK$38.7 million (US$4.99 million), Chung Wing-man, head of the police force’s Narcotics Bureau, said at a press conference.

A 27-year-old suspect allegedly bagged HK$25 million and another with a triad background earned about HK$700,000 from the alleged stock manipulation, according to local media reports.

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Police said transactions of Next Digital’s shares between Aug 7 and Aug 11 increased a whopping 4,000 percent. Its stock price rose from a low of 7.50 Hong Kong cents on Aug 10, when Lai was arrested, to a high of HK$1.96 on Aug 11.

The suspects repeatedly purchased Next Digital's shares at the same or even higher prices, sometimes even before the selling command was executed.

Chow Cheung-yau, superintendent of the Narcotics Bureau

The price quickly dipped to 65 HK cents afterward and caused investors to lose a lot of money. One elderly resident lost more than HK$1 million, police said.

“The suspects repeatedly purchased Next Digital's shares at the same or even higher prices, sometimes even before the selling command was executed,” Chow Cheung-yau, superintendent of the Narcotics Bureau, said at the conference.

Police said the 15 people did this to create the illusion that stock trading was very active. They made use of the comments on social media to attract investors to enter the market and then sold the stocks at high prices for a profit.

Five of the suspects were under the age of 30. “Given that six of the arrestees were unemployed and one was a civil servant, police have reasonable grounds to doubt where their financial resources came from,” Chung said.

Chung said that the police will continue to investigate whether any suspicious sources of funds and behind-the-scenes manipulations were involved, and to find out the whereabouts of illegal profits.

With Xinhua inputs