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Mon, Aug 13, 2007 - Page 10 News List

Shenzhen contract boosts China Public Security's US stock

POLICE TECHNOLOGY The contract for the first phase of the Shenzhen Residence Card System Project has been awarded to China Public Security

NY TIMES NEWS SERVICE AND BLOOMBERG, SHENZHEN, CHINA

Behind Shenzhen's aggressive introduction of new police technologies is an unusual computer software company that has won some of the initial government contracts, China Public Security Technology Inc, and the wealthy tycoon who runs it, Lin Jianghuai (林江懷).

Shenzhen has started a pilot program to upgrade the city's household registration system to more closely monitor the population, China Public Security Technology said.

The Chinese government will use China Public Security's integrated information transfer platform to manage the immigrant population and improve public security, the company said in a statement.

China Public Security is traded in the US on the obscure over-the-counter bulletin board market, but has a market capitalization of almost US$180 million. It is preparing to seek a NASDAQ listing next year, Lin said.

Lin, 38, who holds more than US$100 million in China Public Security stock, said that he dreamed as a boy of becoming a police officer to fight crime and defend the helpless. A powerfully built amateur weightlifter who is also a devout Buddhist, he made his first fortune as a manufacturer of an important component for DVD players.

Lin said the success of US technology during the invasion of Iraq inspired him to acquire the predecessor company for China Public Security and turn it to police work.

"I really felt strongly that the police would absolutely benefit from such technology," he said. "[US President George W.]Bush helped me get my vision."

Lin bought an obscure e-commerce business three years ago and changed its business focus. He then did a so-called reverse merger, in which he bought a tiny Florida printing company with sparsely traded stock, renamed it China Public Security, and turned the software business into a subsidiary of the US company.

China's Ministry of Public Security awarded the contract for the first phase of the Shenzhen Residence Card Information Management System Project to China Public Security to test the new household registration system, which is expected to be completed in three years.

The computer chip-imbedded identity cards will store personal information such as social welfare status, one-child policy conditions, education history and house rental management, the company said. They may also allow the government to access medical history, personal credit history and driving records.

Helping Chinese police agencies has been profitable for China Public Security and its investors. The company estimated in May that it would earn an after-tax profit of US$12.5 million on sales of US$27 million this year.

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