Sat, Aug 08, 2009 - Page 11 News List

Hong Kong court freezes US$1.66bn in assets of Chinese appliance tycoon

AP AND BLOOMBERG , HONG KONG

A Hong Kong court has ordered the freeze of HK$1.66 billion (US$214 million) in assets owned by one of China’s richest people amid an ongoing corruption probe on the mainland.

Hong Kong’s Court of First Instance ordered the freeze on Wong Kwong-yu’s (黃光裕) assets on Thursday in a hearing not open to public following an application made by the territory’s Securities and Futures Commission earlier this week.

Hong Kong’s High Court will hear on Sept. 8 the application by the territory’s securities watchdog to prohibit the disposal of assets by Wong. The schedule of the hearing was posted on the Hong Kong judiciary’s Web site.

Wong, also known as Huang Guangyu, is the founder and former chairman of China’s leading home appliance chain, Gome Electrical Appliances Holdings Ltd (國美電器). He is being investigated in connection to a corruption probe that has already ensnared Chinese government officials. He is accused of stock price manipulation and other crimes.

His wife, Du Juan (杜鵑), who is also under investigation, is reportedly being detained in China.

The court also ordered the couple to list Gome’s transactions over the past two years. The order will remain in force until next month, the court said.

Gome’s shares fell 7.8 percent to close at HK$2.37 in Hong Kong trading yesterday, the most in almost eight months. The stock resumed trading on June 23 after a seven-month trading halt following the detention of Wong by Beijing police for unspecified “economic crimes.”

COUPLE’S ASSETS

Gome said the firm was not approached by any regulators or judicial authorities in relation to the court order. It said the order relates only to the couple’s assets, not to Gome’s business, it said in a Hong Kong Stock Exchange filing.

Gome said it planned to issue another release once it has obtained “further relevant information.”

The Hong Kong Securities and Futures Commission declined to comment on Gome’s statement. Beijing police didn’t reply to a fax sent seeking comment.

Gome was raised to “buy” from “hold” by Citigroup Inc analysts Sandy Chen (陳詠嫻) and Ross Wei in a note to clients. They more than doubled their target price to HK$3.

RE-RATING

“We expect the stock to re-rate given lower financial risk and better earnings outlook on management efforts to change and government stimulus policy,” Chen and Wei said.

Gome, China’s second-biggest electronics retailer by market value, sought funding by selling 1.59 billion yuan (US$$233 million) in convertible bonds to an affiliate of Bain Capital LLC and shares to stockholders. Wong participated in the share offering that raised about HK$1.52 billion.

While Wong was being detained, a subsidiary which he owns raised HK$400 million last month selling Gome stock and acquired new shares as part of the offer, filings to the Hong Kong exchange showed. The unit, Shinning Crown Holdings Inc, is one of the defendants named in the court order.

This story has been viewed 2550 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top