(adds quotes, context)
HONG KONG, May 28 (Reuters) - Hong Kong's securities watchdog took the unusual step on Thursday of confirming that it is investigating Hanergy Thin Film Power Group, the stock that crashed spectacularly last week in a frenzied hour of trading.
The statement from the Securities and Futures Commission (SFC) came just hours after China's official news agency Xinhua aired a television interview with Hanergy's Chairman Li Hejun, in which he dismissed as "purely a rumour" reports that the solar technology company was under investigation, adding it was "absolutely impossible".
"The SFC wishes to clarify that a formal investigation into the affairs of Hanergy Thin Film Power Group Limited has been active and is continuing," the regulator said in an e-mailed statement.
The SFC did not disclose the nature of the probe, adding: "The SFC will make no further comment about the investigation."
Hanergy did not answer calls for comment.
The regulator does not normally disclose its investigations into listed companies, but said it was in the public interest to do so on this occasion "following reports denying such measures have been taken". The last time it made such a disclosure was in 2009 following a plunge in the shares of HSBC.
Reuters reported last week that the SFC had been investigating Hanergy over alleged market manipulation following an extraordinary five-fold increase in its market value since September that has attracted a storm of media attention.
This meteoric rise came to a sudden end on May 20, when Hanergy's stock plunged 47 percent in less than an hour, wiping $18 billion off its market value before being suspended at the company's request.
SFC investigations don't usually come to light unless the watchdog decides to take civil or criminal action against the party concerned, or if the company decides to disclose the investigation through stock exchange filings.
Two sources with knowledge of the matter said Hanergy hoped its shares would resume trading this week, but it had not yet been able to satisfy enquiries from the Hong Kong stock exchange.
Suspended shares subject to a regulatory investigation can take years to begin trading again in Hong Kong, exchange data shows. (Reporting by Michelle Price and Elzio Barreto; additional reporting by Clare Jim; Editing by Rachel Armstrong)