China has frozen a chunk of stock in a Shanghai-listed firm whose chairman has vanished leaving the company wallowing in debt as details emerge of a case that one securities newspaper on yesterday likened to a "black hole."
Xinjiang Hops Co Ltd had been trying to raise Aikelamu Aishayoufu, one of China's most powerful businessmen, since last Thursday, executives said, in the latest scandal to ensnare the country's embattled tycoons.
The brewery said on Tuesday the ethnic Uighur tycoon, a prominent local businessman, had left behind total liabilities of over 1.7 billion yuan (US$205.4 million) -- nearly three times net assets of 600 million yuan.
Part of that included previously undisclosed liabilities -- in the form of debt guarantees -- of 987.86 million yuan.
Now regulators have locked out two-thirds of a 26.61 percent stake owned by Xinjiang Hengyuan Investment, which had mortgaged that stake to the Urumqi branch of the China Construction Bank, Hops said in a statement in the Shanghai Securities News.
Those shares would be frozen for a year until Nov. 2, 2004, the company said.
The rest of Xinjiang Hengyuan's stake had been mortgaged to local Urumqi Commercial Bank, the company added.
The International Finance News reported that Aishayoufu controlled Xinjiang Hengyuan.
"How big is the black hole?" said the Shanghai Securities News. "We do not know if this more than 1.7 billion yuan which has just been revealed is the final figure. Bombs just keep going off."
A former central bank official and the deputy chief of a local business body, Aishayoufu was named last month China's 22nd most powerful businessman in terms of capital controlled by a public company in a poll by Asiamoney magazine.
A number of other tycoons have run afoul of the law in the Communist-run country whose fast-growing economy is increasingly in the hands of freewheeling capitalists.
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