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Huang Guangyu Excessive Assets Sealed by Hong Kong Court

2009-10-12

中国经贸聚焦·英文版 2009年9期

On August 4, the Hong Kong Security Regulatory Commission (HK SRC) submitted an application to the Hong Kong Supreme Court, asking for sealing the 1.655-billion-HK dollar assets owned by former Chairman of Gome Group Huang Guangyu and his wife Du Juan. The application was approved on August 5 and the hearing for this case was held on September 8.

According to the HK SRC, Huang and his wife planned to repurchase the stocks of Gome in January and February 2008, with the purpose of buying Gomes shares held by Huang Guangyu with the corporate capital. Huang used these stocks to pay for his personal loans. From January 22 to February 5, they repurchased 129 million Gomes shares, with the total value of 2.2 billion HK dollars. The HK SRC believed that this deal made the other shareholders of Gome lose about 1.6 billion HK dollars.

It is believed that the action of the HK Supreme Court was related with Huangs moving of a large of capital in prison. In this June, Gome, forced by the capital stress, introduced the Bain Capital to realize the financing of 2.236 HK dollars. The plan of capital increase included the issuance of convertible bonds and selling the new stocks to the old shareholders. On July 20, Huang sold 235 million Gomes shares at 0.672 HK dollars per share, getting the cash of 400 million HK dollars. Then he spent 549 million HK dollars in the rights offering of Gome. These movements helped him strengthen the hold of Gome. After the subscription, Huang, taking 34% of Gome shares, is still the largest shareholder of the company.