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January 28, 2014

new developments in CNOOC insider trading case

Another $11m in SEC settlements related to insider trading ahead of CNOOC’s acquisition of Nexen in 2012, this time from two HK asset managers owned by, among others, a CITIC Group subsidiary and one Wang Junyan 王俊彥, and some of their clients. Mr Wang is the chairman of one of the companies agreeing to settle (China Shenghai 盛海 Investment Management Ltd), a JV partner (as per the Reuters story) in the other one and has sat in the boards of various HK-listed companies. He’s also an adjunct professor at the Business School of the Chinese University of Hong Kong.

Previous settlements have included $14m with a firm controlled by shipbuilding magnate Zhang Zhirong 张志熔, then some $3m with a trader at GF Securities Hong Kong. Among the owners of accounts frozen in 2012 at the SEC’s request in connection with the Nexen deal were entities related to gold miner Zhaojin 招金 and Jun Yang Solar (君陽太陽能). Wang Junyan used to be a shareholder of the latter.

October 10, 2013

reverse merger to reverse-merge

Posted on Tumblr on Sep 30.

After listing in New York through a reverse merger, then going private in 2012 with CDB money, chairman Tu Guoshen 涂国身 is now marching a subsidiary of China Security and Surveillance Technology (中国安防技术有限公司) towards another reverse takeover – only this time in Shanghai. CSST had aired an intention to list domestically right after going private, but an IPO is not an option at the moment: a 900-long queue has grown since China suspended IPOs last year. It’s a peculiar operation. First, Feilo (上海飞乐股份有限公司), the Shanghai-listed auto part manufacturer expected to buy CSST subsidiary China Security and Fire Technology (中安消技术有限公司), isn’t quite a shell: it’s reported to have a higher revenue than CSST, yet they’re planning to abandon their current business. Shanghai city gov’t-owned Inesa (上海仪电控股集团公司) owns about a sixth of Feilo. Second, Feilo is said to be paying about $750m for one unit of CSST. That’s a third more than gu it cost Mr Tu to delist the whole company last year, and more than ten times Security & Fire’s June net asset value. Rumours that have been around for some time, now joined by unnamed sources on Chinese media, claim that Mr Tu’s success in listing CSST back in 2010 owed more than a bit to creative accounting, and that it was fear of SEC scrutiny what led him to delist it two years later. CSST’s activities abroad have included purchasing a row of Asian security firms (UTC’s HK unit Guardforce among them), as well as some involvement in (not always successful) construction projects in Iceland, Hungary, Australia, Bulgaria and Henderson, Nevada.