The decision of Jack Ma's investment fund to buy a 56 percent stake in Hong Kong's Reorient Bank has sent the share prices of the bank soaring. 

According to Bloomberg Business, Reorient Bank shares had risen by up to 152 percent as at Fri. May, 29. The bank's share prices reportedly closed at HK$22.65 on the Hong Kong Stock Exchange last week. Bloomberg reports that this is the highest one day share price increase for the investment bank.  The report also notes that it was in 2007 that Reorient's stock price ever reach such height.

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Reports indicate that Reorient Group Ltd. informed the Hong Kong Stock Exchange that Jade Passion Ltd., a subsidiary of Yunfeng Financial Holdings Ltd., has agreed to purchase a 56 percent stake in the company.  The bank is set to issue 1.34 billion of its shares, for which Jade Passion will pay HK$2.68 billion ($346 million). Based on the agreed amount, each new share costs $2. 

The buying compay has reportedly asked the stock exchange to relax a rule that would have compelled it to make an obligatory offer of buying out the bank.

A statement issued last week by the co-founder and chairman of Yunfeng, David Yu, highighted the fact that buying a majority stake in Reorient is a "strategic investment" that will help Yunfeng expand globally, The Economic Times reported.

Yu added that Yunfeng would probably use Reorient in the online finance sector. The statement also disclosed that Yu controls 60 percent Yunfeng, while Alibaba Chairman Jack Ma controls the remaining 40 percent.

The planned purchase of stocks in Reorient will clearly increase Jack Ma's stake in the financial sector as well, according to Reuters. The 50-year-old entrepreneur set up the Alibaba Group, the largest e-commerce firm in the country, and he is currently the chairman of the company. Ma also has a majority stake in Zhejian Ant Small & Micro Financial Services Group, the parent company of Alipay, the biggest online payment service in the country.  Additionally, Alipay has a bank, operates a money market fund and offers credit rating services.

Reorient declared that it will issue 1.94 billion shares - including the shares that Jade Passion is set to purchase. The total estimated amount that can be realized from the sale is around HK$3.89 billion.

The company has revealed that only two of the original executive directors at Reorient will be retained after the Jade purchase is completed.

TagsJack Ma, Reorient, Yunfeng, Jade Passion, chinese investment, Yunfeng Financial Holdings Ltd.