Jimmy Lai Chee-ying is taken by the police to the headquarters of Apple Daily for investigation in Hong Kong, south China, Aug. 10, 2020. (Xinhua/Lui Siu Wai)

A Hong Kong resident complained Tuesday that the Hong Kong Securities and Futures Commission (SFC) had not moved in a timely manner to suspend trading of Hong Kong media firm Next Digital, run by Apple Daily publisher Jimmy Lai Chee-ying, saying that unusual movements in the share price would eventually harm investors' interests and the stock exchange's reputation.

The complaint came as Next Digital shares soared for the second day in a row, after Lai was arrested for violating the national security law of Hong Kong for colluding with foreign forces.

Next Digital share prices surged 331.37 percent to close at HK$1.10 on Tuesday, which was a rise of about 1,100 percent compared with the price on Friday.

Chairman of PolitiHK Social Strategic Innes Tang, who filed the complaint to the SFC, told the Global Times that amid the unusual share price rise, the SFC had taken no action, which was completely different from the way it previously handled similar incidents involving listed firms. 

"This would make the public question the SFC's management and regulations," Tang said.

He urged the SFC to immediately suspend trading in Next Digital until there is a conclusion about Lai's illegal deeds and the company provides its own account of the incident.  "As the only capital market regulator, the SFC has an inescapable responsibility to guarantee investors' interests."

The SFC didn't immediately respond to the Global Times' email seeking comment Tuesday. 

The Hong Kong Stock Exchange told the Global Times that the exchange doesn't comment on any specific company.

Next Digital didn't disclose why its shares surged so much. It made a statement Monday saying that the arrest of its executive directors "is not expected to have any material adverse impact on the daily operations of the group which have continued in the ordinary course."

The firm's market capitalization rose to HK$670 million from HK$200 million Monday, while the value of stakes held by Lai also increased sharply to HK$480 million from HK$140 million.

Although some of Lai's supporters posted on Facebook that they bought Next Digital's shares to show confidence in the company's future prospects, the information they disclosed showed that those people accounted for only a tiny portion of the transactions.

"Some political funding connected with Hong Kong separatists may be behind Next Digital, aiming to rapidly increase its fortune by manipulating the stock," Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology, told the Global Times Tuesday.

No reasonable investors would invest in a company whose controller has been arrested and may face severe criminal charges, Dong said, adding that any new investor hoodwinked into buying such junk stocks would eventually find themselves losing out.

However, some observers noted that the company's rise in stock price could also be due to genuine speculation over Next Digital's future. Lai's arrest could be seen as good news for those investors who plan to increase their holdings in the company at a low price with the expectation that Next Digital could be acquired as a shell company, an analyst who preferred to be unnamed told the Global Times.

The SFC said on Tuesday that "investors are strongly advised to exercise extreme caution when dealing in the shares of Next Digital."