Huang asset freeze is extended
Source: Agencies/Shanghai Daily |
01:00 UTC+8 September 9, 2009
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Print Edition
Print Edition
A HONG Kong court yesterday extended an order freezing US$214 million of assets owned by one of China's richest men amid an ongoing corruption probe in Chinese mainland.
The assets owned by Huang Guangyu and his wife have been frozen since early August after an application by Hong Kong's Securities and Futures Commission.
Huang is founder and ex-chairman of China's leading home appliance chain, Gome Electrical Appliances. He is being investigated by Chinese mainland authorities in connection with a corruption probe that has already ensnared government officials. He is accused of stock price manipulation and other crimes.
His wife, Du Juan, also under investigation, is reportedly being detained on the mainland.
The court order in Hong Kong serves to prevent Huang, Du and the two companies through which Huang holds his stake in Gome from removing and dealing with the assets while SFC is investigating a share repurchase allegedly planned by Huang.
The regulator alleged that Huang had used the proceeds of the buy-back of Gome shares worth HK$2.2 billion (US$284 million) between January and February 2008 to repay a personal loan of HK$2.4 billion to a financial institution.
The dealings caused Gome and its shareholders to lose HK$1.6 billion, the SFC has said. The commission is also seeking a ruling that the couple pay unspecified damages to Gome and restore the financial positions of any parties involved.
The order will remain in force until Huang's trial for organized securities fraud, Judge Susan Kwan said yesterday. A trial date hasn't been set yet as the SFC is still investigating.
Gome said its assets are not subject to the court order and that its businesses have not been affected by it. But analysts said the case could affect investor confidence in the company's management.
"It may raise concerns from lenders and suppliers. As a result, the company may face cash pressure if lenders reduce loans to it or suppliers stop providing products," said Liang Ying, an analyst at China Merchants Securities.
Gome shares fell 1.8 percent to HK$2.19 yesterday, compared with a gain of 2.14 percent in the Hang Seng Index.
The assets owned by Huang Guangyu and his wife have been frozen since early August after an application by Hong Kong's Securities and Futures Commission.
Huang is founder and ex-chairman of China's leading home appliance chain, Gome Electrical Appliances. He is being investigated by Chinese mainland authorities in connection with a corruption probe that has already ensnared government officials. He is accused of stock price manipulation and other crimes.
His wife, Du Juan, also under investigation, is reportedly being detained on the mainland.
The court order in Hong Kong serves to prevent Huang, Du and the two companies through which Huang holds his stake in Gome from removing and dealing with the assets while SFC is investigating a share repurchase allegedly planned by Huang.
The regulator alleged that Huang had used the proceeds of the buy-back of Gome shares worth HK$2.2 billion (US$284 million) between January and February 2008 to repay a personal loan of HK$2.4 billion to a financial institution.
The dealings caused Gome and its shareholders to lose HK$1.6 billion, the SFC has said. The commission is also seeking a ruling that the couple pay unspecified damages to Gome and restore the financial positions of any parties involved.
The order will remain in force until Huang's trial for organized securities fraud, Judge Susan Kwan said yesterday. A trial date hasn't been set yet as the SFC is still investigating.
Gome said its assets are not subject to the court order and that its businesses have not been affected by it. But analysts said the case could affect investor confidence in the company's management.
"It may raise concerns from lenders and suppliers. As a result, the company may face cash pressure if lenders reduce loans to it or suppliers stop providing products," said Liang Ying, an analyst at China Merchants Securities.
Gome shares fell 1.8 percent to HK$2.19 yesterday, compared with a gain of 2.14 percent in the Hang Seng Index.
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