Gome Boss Held Over Alleged Share Price Manipulation of Brother’s Firm
Jasmine Wang 24 November 2008
The mainland’s richest man has been detained over alleged share price manipulation, according to financial magazine Caijing.
Wong Kwong-yu, the founder and chairman of Gome Electrical Appliances Holdings, the nation’s largest chain of consumer electronics stores, was involved in illegally manipulating shares of Shanghai-listed pharmaceutical firm Shandong Jintai Group, the report said.
Shandong Jintai is largely owned by Mr. Wong’s elder brother, Wong Chung-yam, and its stock shot up by the 10 per cent daily limit more than 30 times last year.
The 39-year-old appliance tycoon is a native of Guangdong and topped Hurun Report’s annual rich list released last month with US$6.3 billion in assets.
According to a source close to Gome, trading in the shares of the company would be suspended from today and the company would make an announcement.
Gome is supposed to release its third-quarter result today, after which president Chen Xiao and chief financial officer Zhou Yafei were scheduled to have a conference call with analysts.
However, the conference call had been cancelled, although it would release the results on schedule, the source said.
There had been massive text messages and media reports that said the company’s top management was in trouble since Friday.
It is rumoured that Mr. Zhou has also been detained.
Phone calls to Mr. Zhou, Wong’s wife Du Juan and Gome’s spokesman were not returned.
Shandong Jintai announced in July last year that its shareholders would inject 22.1 billion yuan (HK$25 billion) worth of assets into the listed company and also raise about 2.57 billion yuan through a private share placement.
After the statement, its shares shot up by the 10 per cent daily limit 26 times with the share price rocketing to a record 26.58 yuan, but its shares slumped soon after. They closed at 2.31 yuan on Friday.
This was not the first time the Wong brothers had been reported to be under investigation.
In 2006, it was reported that the duo obtained illegal loans amounting to 1.3 billion yuan granted by the Beijing branch of the Bank of China but the company denied the reports.
Mr. Wong, who also ventured into private equity as head of Pengrun Investment, appeared at a teleconference call last month to boost investor confidence after Gome shares plunged about 50 per cent from September to October.
Shares of Gome closed down 3.45 per cent at HK$1.12 on Friday.
1 comment:
Gome Boss Held Over Alleged Share Price Manipulation of Brother’s Firm
Jasmine Wang
24 November 2008
The mainland’s richest man has been detained over alleged share price manipulation, according to financial magazine Caijing.
Wong Kwong-yu, the founder and chairman of Gome Electrical Appliances Holdings, the nation’s largest chain of consumer electronics stores, was involved in illegally manipulating shares of Shanghai-listed pharmaceutical firm Shandong Jintai Group, the report said.
Shandong Jintai is largely owned by Mr. Wong’s elder brother, Wong Chung-yam, and its stock shot up by the 10 per cent daily limit more than 30 times last year.
The 39-year-old appliance tycoon is a native of Guangdong and topped Hurun Report’s annual rich list released last month with US$6.3 billion in assets.
According to a source close to Gome, trading in the shares of the company would be suspended from today and the company would make an announcement.
Gome is supposed to release its third-quarter result today, after which president Chen Xiao and chief financial officer Zhou Yafei were scheduled to have a conference call with analysts.
However, the conference call had been cancelled, although it would release the results on schedule, the source said.
There had been massive text messages and media reports that said the company’s top management was in trouble since Friday.
It is rumoured that Mr. Zhou has also been detained.
Phone calls to Mr. Zhou, Wong’s wife Du Juan and Gome’s spokesman were not returned.
Shandong Jintai announced in July last year that its shareholders would inject 22.1 billion yuan (HK$25 billion) worth of assets into the listed company and also raise about 2.57 billion yuan through a private share placement.
After the statement, its shares shot up by the 10 per cent daily limit 26 times with the share price rocketing to a record 26.58 yuan, but its shares slumped soon after. They closed at 2.31 yuan on Friday.
This was not the first time the Wong brothers had been reported to be under investigation.
In 2006, it was reported that the duo obtained illegal loans amounting to 1.3 billion yuan granted by the Beijing branch of the Bank of China but the company denied the reports.
Mr. Wong, who also ventured into private equity as head of Pengrun Investment, appeared at a teleconference call last month to boost investor confidence after Gome shares plunged about 50 per cent from September to October.
Shares of Gome closed down 3.45 per cent at HK$1.12 on Friday.
Post a Comment