Feb. 7, 2007 (China Knowledge) – PC maker Lenovo Group will be required to explain to the Hong Kong stock exchange why it delayed in notifying the market yesterday of a 3.5% stake sale by a major shareholder.

The delay allowed the stock to slide 6.98% in the 16 minutes after the market opened before trading was finally halted.

IBM, which owns 15% of Lenovo and sold its PC maker business to the Chinese company for US$1.25 billion in 2005, sold on Monday 300 million Lenovo shares at HK$3.20 to HK$3.30 each in a placement by Citigroup.

A South China Morning Post report cited an exchange source as saying that Lenovo only requested the belated suspension after exchange officials called on the company "to clarify news of the share placement".

Under exchange rules, companies are supposed to make an announcement on the exchange of price-sensitive information and request a suspension of trade.