* Ding Yi Feng loses as much as $3.4 bln in market value
* Shares had run up 3,500% in less than two years
* SFC to begin proceedings again one or more company officers (Recasts and writes through)
By Alun John
HONG KONG, Jan 23 (Reuters) - Chinese asset manager Ding Yi Feng, known for a 3,500% share price rally in less than two years, lost as much as $3.4 billion in market value on Thursday after regulators said they would begin legal proceedings for market manipulation and lifted a trading halt.
The mysterious run-up in its share price invited scrutiny from Hong Kong’s Securities and Futures Commission, which suspended trade in its shares last March.
On Thursday, the asset manager saw its shares tumble as much as 93% shortly after the market open to HK$1.06. The shares regained some ground to stand at HK$2.7 in late morning trade - still a far cry from its Nov. 2, 2018 peak of over HK$28.
Ding Yi Feng describes itself on its website as using a combination of modern investment techniques and traditional Chinese culture to guide investment decisions. Each morning its staff read the Daoist philosopher, Laozi, the website says.
In a January filing, the company said its net assets were worth approximately HK$0.07 per share.
The SFC said on Wednesday it would begin proceedings against one or more officers of the company for suspected market manipulation. It has been under pressure to step up policing of the market after a sudden 2016 crash in a group of several small stocks wiped out more than $6 billion of market capitalisation on a single day.
Twice last year, the SFC ordered groups of brokers to freeze trading in Ding Yi Feng’s shares. Those shares, which account for 32% of the total, remain frozen, the regulator said on Wednesday. ($1 = 7.7725 Hong Kong dollars) (Reporting by Alun John; Additional reporting by Donny Kwok; Editing by Jennifer Hughes and Edwina Gibbs)