Hong Kong police attend a Thursday briefing about the arrest of 15 people in connection to the surge in shares of Next Digital. Photo: cnsphoto

Hong Kong police have detained 15 people for manipulating the stock price of Next Digital, which soared more than 1,100 percent following the arrest of its founder Jimmy Lai last month, the Hong Kong police confirmed to the Global Times on Thursday. 

Those detained include 14 males and one female, according to the Hong Kong police, with ages ranging from 22 to 53. They are suspected of conspiracy to defraud. 

One of those arrested reportedly earned HK$25 million ($3.23 million) from the stock manipulation, according to a report by the South China Morning Post on Thursday.

The company's shares swung violently Thursday afternoon after the news broke. The price more than doubled to an intraday peak of HK$0.5, before dropping to HK$0.41 at close.

Next Digital is a Hong Kong media company founded and run by Lai, who also publishes the Hong Kong tabloid newspaper Apple Daily. Lai was arrested on August 10 for violating the national security law for Hong Kong and colluding with foreign powers in Hong Kong, and he was released on bail after 36 hours of detention. 

The media company's shares saw drastic price fluctuations after Lai's arrest. On the day of his arrest, Next Digital's shares surged more than 330 percent, with transactions jumping to more than 410 million shares in the afternoon. On the day after the arrest, the price spiked by more than 1,100 percent compared with the last trading day before the arrest. 

In the following days, Next Digital plunged more than 40 percent, raising alarms at the local market regulator Securities and Futures Commission, which urged investors to exercise "extreme caution."

Share manipulation can be determined by the motivation and the frequency of trading, usually to inflate the price. Manipulators can place the same amount of sell and buy orders, which cancel each other out but give the impression of increasing demand, Dong Dengxin, director of the Finance and Securities Institute at the Wuhan University of Science and Technology told the Global Times. 

"There is strong suspicion of manipulation in the shares of Next Digital, and only a few would have gained at the cost of most investors," Dong said. 

Next Digital has reported losses over the past decade. According to media reports, a total of HK$415 million of losses was reported in 2019 alone.