Gold-Finance executives face probe, trade haltedBusiness | Avery Chen and Xinhua 30 Apr 2019
Shares of Gold-Finance (1462) suspended trading yesterday morning pending the release of inside information after mainland authorities reported that its chairman, Jay Wei Jie, and executive director Xu Liyun were under investigation by Public Security Bureau officers on suspicion of illegal absorption of public deposits.
Gold-Finance fell 1.06 percent to HK$0.46 before the trading halt.
Its share price has slumped more than 87 percent from May 18 last year. That was when mainland media reported that parent JG Group was suspected of self-financing and self-insurance of its public-private partnership order, which was worth 570 billion yuan (HK$664 billion).
What are referred to as PPPs are a collaborative investment model between government and private companies.
Chinese authorities have explored funding infrastructure and public works through PPP models since late 2013, reducing local government debts and opening new opportunities for private capital.
Hangzhou-based Gold-Finance is engaged in investment and asset management, mainly targeting infrastructure and PPP projects of the Chinese government and state-owned enterprises.
Other activities include property investment and development and an industry investment fund.
The company announced last night that it has been unable to reach Wei, who also serves as chairman of JC Group, and Xu since April 28. And the board believes that the continued absence of Wei and Xu will have an adverse impact on the group's operations and finances.
Gold-Finance has applied to Hong Kong's stock exchange for the resumption of trading from 9 am today.
Founded in 2008, JC Group, the parent company of Gold-Finance, is a city development group and is involved in wealth management besides real estate.
JC Group said last month that its total assets at September 30 last year were 20.2 billion yuan, total liabilities 10.3 billion yuan and total equity was 9.9 billion yuan.
The group also said last week that a strategic reorganization had entered the implementation stage, though details were being kept under wraps to prevent competitors who would seek to profit with that information.
A total of 8,780 PPP projects had been registered in a national data bank by the end of February, according to the China Public-Private Partnerships Center.
These projects had a combined investment of 13.3 trillion yuan, up 88.5 billion yuan from a month earlier.