Shares in a major Chinese dairy firm suddenly nosedived as much as 91% on Friday leaving investors reeling.

The rapid sell-off wiped $4.1 billion off China Huishan Dairy's market value in Hong Kong before the company requested a trading halt around midday.

One veteran of Hong Kong markets said he'd never seen anything like it before.

"It is very unusual to have a stock drop that far," said Andrew Sullivan, managing director of sales trading at Haitong International Securities in Hong Kong.

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The volume of trading was "quite incredible," he said, noting a whopping 779 million shares in the company were traded Friday, compared with a daily average of about 14 million.

Huishan declined to provide an immediate comment on the drop in its stock.

The mysterious plunge comes more than three months after U.S. investment research firm Muddy Waters slammed Huishan in a lengthy report. It accused the company of engaging in fraud and reporting fake profits.

A privately held company called Champ Harvest owns about 73% of Huishan, according to FactSet. Champ Harvest lists Huishan Chairman Yang Kai as one of its two directors.

In its December report, Muddy Waters said it was betting Huishan's stock would fall "because we believe it is worth close to zero."

Huishan's shares were halted Friday just a nickel shy of Muddy Waters' valuation, at $0.42 Hong Kong dollars (about 5 U.S. cents).

Related: Muddy Waters: Be wary of Hong Kong listed Chinese companies

Huishan rejected the Muddy Waters report when it was published in December, calling the allegations "groundless" and saying the report contained "obvious factual errors."

Nevertheless, the day after Muddy Waters published its report, Huishan requested a trading halt of its shares for three days.

But the stock has since resumed trading and it wasn't immediately clear what had triggered the crash on Friday. Even Carson Block, the founder of Muddy Waters, was taken aback.

"I haven't ever been involved with a stock that holds this steady pattern for a few months after our initial report, and then just crashes with no advance warning -- that's the first time for me," Block told Bloomberg.

Muddy Waters has been sounding the alarm for years on questionable accounting practices by Chinese companies listed in the U.S., Canada and Hong Kong.

The firm made a name for itself in 2011, after it accused Chinese timber company Sino-Forest of fraud. The scathing report triggered a massive sell-off in Sino-Forest shares in Toronto before they were eventually delisted.