Hong Kong's securities regulator warned investors to "exercise extreme caution" when trading Affluent Foundation (HKG:1757), citing a high concentration of shareholding, according to a Thursday Hong Kong bourse filing.

Shares of the firm were down nearly 13% in Friday morning trade.

The Securities and Futures Commission said its enquiry found that, as of Jan. 12, 25 shareholders held 183.2 million shares, representing 15.26% of the company's issued share capital.

Combined with the 75.37% stake held by China VC Holdings Limited, the holdings accounted for 90.63% of Affluent Foundation's issued shares, leaving just 9.37% in public hands.

The regulator said such a tightly concentrated shareholding structure could lead to substantial price volatility even on limited trading volume.

In a separate filing, Affluent Foundation said its public float stood at not less than 25% of issued shares as of Jan. 16, in compliance with Hong Kong listing requirements