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August 8, 2009

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HK freezes Huang's assets

SHARES of Gome Electrical Appliances dropped the most in eight months yesterday after a Hong Kong court ordered the freeze of US$214 million worth of assets owned by Huang Guangyu, one of China's richest people amid an ongoing corruption probe on the mainland.

Gome, however, said in a statement yesterday that the freezing of Huang's assets is not related to its business or its subsidiaries.

Hong Kong's Court of First Instance ordered the freeze of Huang's assets on Thursday in a hearing not open to the public following an application made by the territory's Securities and Futures Commission earlier this week.

Gome said the company was not approached by any regulators or judicial authorities in relation to the court order. It said the order relates only to Huang and his wife's assets, not to Gome's business, according to a document filed to Hong Kong's stock exchange yesterday.

Huang is the founder and former chairman of Gome, China's leading home appliance chain. He is being investigated in relation to a corruption probe. He is accused of manipulating stock prices and other crimes.

His wife Du Juan, 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 September, the court said.

The electronic retailer's shares slid 7.78 percent to HK$2.37 (31 US cents) yesterday. The benchmark Hang Seng Index dropped 2.51 percent to 20,375.37 points.

Huang has raised his stake in the company to consolidate his position as the biggest share holder by purchasing 816.3 million new issuing shares with HK$549 million, the company said in a July 31 announcement.


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