Trading in Gome Electrical Appliances Holdings Ltd. has been suspended since November 24, 2008 after Huang Guangyu, the founder and former chairman of the company, was detained by the police under suspicion of market manipulation. On November 28, 2008 the company announced that a preliminary internal investigation had found no evidence of misappropriation of the group's funds and assets. But a risk analysis and an examination of related transactions and internal control systems will also be carried out by an independent accounting firm.
Trading in Gome has been suspended for 4 months. The company will have to clarify its financial situation as soon as possible so as to avoid being delisted by the Hong Kong bourse.
However, a share transaction took place recently in spite of Gome's trading suspension. On March 16, Capital Research and Management Company (CRMC) sold 37,113,000 Gome shares at a price of 0.9 HK dollar (US$0.12) per share. The deal was worth 33,401,700 HK dollars (US$4,309,869), according to the Hong Kong bourse. Gome will launch an investigation into how this transaction was allowed to take place, group insiders told Oriental Morning Post.
Following this offload 7.82 percent of Gome shares are still held by CRMC, which means that it is still among Gome's top three institutional investors. CRMC is a wholly-owned subsidiary of Capital Group Companies, Inc, which is very active in the Hong Kong market. The Group also holds shares in many U.S. retailers, such as Best Buy and Wal-Mart.
For more details, please read the full Chinese coverage at:
http://www.dfdaily.com/node2/node27/node120/userobject1ai160095.shtml
(China.org.cn March 25, 2009)
