Share shuffle aimed at keeping Cheng clear of sanctionsTop News | Maisy Mok 12 Aug 2020
A building services firm chaired by Secretary for Justice Teresa Cheng Yeuk-wah's husband has sold part of its stake to a New York-based elevator company following US legal advice amid the national security law tit-for-tat sanctions.
Cheng's husband, Otto Poon Lok-to, holds a 63 percent stake in Analogue Holdings, in which he is executive director, and so the justice chief is deemed to hold a majority ownership with her husband.
Analogue announced yesterday that wholly owned subsidiary Anlev (US) sold its 2 percent stake to the New-York based Transel Elevator & Electric.
This served to cut Analogue's 51 percent stake on Transel that it had agreed to buy on March 31 this year for US$35.7 million (HK$278.46 million) to 49 percent.
"With the advice from its US legal counsel, the company has reassessed the regulatory, operating and business environment in the United States," Analogue said in a statement.
Transel president Mark Gregorio, who holds a 29.4 percent stake, purchased the 2 percent stake for US$1.4 million.
Analogue said the change would serve the best commercial interests of both companies, including shareholders and investors. It said the disposal of the 2 percent equity interest in Transel took place immediately upon signing an agreement at 10pm on Monday.
The sale meant Transel would no longer be a subsidiary of Analogue, although it would remain Transel's largest shareholder.
The move came after the US Department of Treasury imposed sanctions on 11 Hong Kong and mainland officials, including Cheng, on Friday because of their roles in implementing the national security law in Hong Kong.
Under the action by the US Treasury's Office for Foreign Assets Control all properties and entities that are owned, directly or indirectly - 50 percent or more - by Cheng in the United States was blocked and must be reported to the office.
In response to the US sanction on Cheng, Analogue said at the weekend that it did not apply to the company and that its overall operations and business remained normal.
"Ms Cheng does not have any rights to the shares, has no rights to dividend, has no rights to vote and has no rights to deal in respect of the shares," Analogue said in a statement on Sunday.