Innovax (HKG:2680) said it could become the subject of a mandatory takeover after its controlling shareholder agreed to sell his holdings to an investor, according to a Hong Kong bourse filing Sunday.

Shares of the financial company gained nearly 38% in Monday's trade.

The company's chairman and controlling shareholder, Chung Chi Ma,n agreed to sell his 75% stake in the business to an individual identified as Wang Tingfa for HK$270 million.

The sale could trigger a mandatory takeover of the business under relevant Hong Kong law and Wang has offered to buy the rest of the company at HK$6 per share in cash.

Innovax said it had formed an independent board committee to advise shareholders on the matter.