Fri, Apr 02, 2010 - Page 11 News List

Hong Kong seeks to recover Chinese firm’s IPO proceeds


Hong Kong’s market watchdog has moved to recover almost US$130 million raised by a Chinese fabric maker in its initial public offering (IPO) after a string of new listing debacles last year.

The Securities and Futures Commission (SFC) applied for an injunction on Tuesday to freeze funds raised by Hontex International Holdings Co (洪良國際控股), which listed on the city’s bourse on Christmas Eve.

A court official yesterday declined to confirm reports that the injunction had been granted to the SFC, which also declined comment.

The complaint, lodged on Wednesday, asked that “a proper person be appointed to recover, receive and administer up to the amount of HK$997,400,000 [US$128 million], being equal to the sum of the proceeds of the initial public offer of [Hontex].”

On Tuesday, the regulator ordered that trading in Hontex shares be suspended without giving details. The complaint does not list details of the SFC’s allegations, but it asks the court to rule that Hontex had breached sections of Hong Kong securities law which deal with deception and fraud.

Staff at its headquarters in Fujian Province said the “person in charge” was on a business trip and refused to provide contact information.

“We’ve employed lawyers so we can’t disclose any information right now,” Hontex chief financial officer Fion Ko (高明慧) said by telephone from the company’s Hong Kong office.

The Fujian-based company is run by Taiwanese tycoon Shao Ten-po (蕭登波).

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