HONG KONG (BLOOMBERG) - Hong Kong's securities regulator ordered brokerages to freeze client assets linked to suspected market manipulation in shares of China Ding Yi Feng Holdings Ltd, the obscure investment firm whose mysterious 8,500 per cent rally over the past five years made it the best performer in MSCI's global stock index.

The city's Securities and Futures Commission has been investigating suspicious trading in DYF since mid-2018, it said in a statement on Wednesday, calling the company's share price "irrationally high." DYF was valued at around 95 times net assets, one of the most expensive levels worldwide, before the SFC suspended the stock and searched the company's offices earlier this month.

The SFC, which didn't name any owners of the frozen assets, said it's not investigating the brokerages. As a group they hold about 38 per cent of DYF's issued shares, according to data compiled by Hong Kong's stock exchange. Jonathan Li, a spokesman for the SFC, declined to comment further. A DYF representative said the company will cooperate with regulators.

The case adds to a long list of suspicious stock moves in Hong Kong that have threatened to dent the city's reputation as one of the world's premier financial hubs. It also puts a spotlight on MSCI's decision to add DYF to its global benchmark indexes in November, a move that prompted emerging market index-tracker funds run by BlackRock, Vanguard Group and Northern Trust Corp to become some of DYF's biggest shareholders.

DYF, which operates similarly to a closed-end fund in the US, had a market value of about US$3.6 billion before trading in the stock was frozen. The company is led by Sui Guangyi, a Taoist scholar who has boasted investing skills on par with those of Warren Buffett and George Soros but who's overseen lackluster results at DYF. The company lost money for seven of the past eight years.