Gome removed from Hang Seng Indexes
Updated: 2008-12-25 07:36
By Hui Ching-hoo(HK Edition)
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Gome, the mainland's second-largest electronics retailer, was removed from the Hang Seng China Enterprises Index and Hang Seng Composite/Freefloat Index series yesterday.
The company's shares have been suspended since November 24, following the detention of the company chairman, Huang Guangyu, and chief financial officer Zhou Yafei for alleged stock manipulation.
Hang Seng Indexes Company announced yesterday that it would take Gome off the indexes in view of the prolonged suspension of the company's shares.
Meanwhile, the HSI Company added Harbin Power to the Hang Seng China Enterprises Index, Hang Seng Composite Index Series and Hang Seng Freefloat Index Series, given the company was the largest non-constituent stock in terms of market value over the past 12 months.
Harbin Power will also join the H-shares index, raising the number of companies in the index from 42 to 43.
In addition, HSI Company counted Shanghai Electric in upon compiling the Hang Seng China AH Index Series, saying the Shanghai-listed company meets all the criteria for entering the AH index. The change raised the number of companies in the index from 41 to 42.
Gome has been in trouble since mainland media reported that Huang had been illegally manipulating shares of Shanghai-listed pharmaceutical company Shandong Jintai Group. Huang's arrest was confirmed by a spokesperson of the Beijing Municipal Public Security Bureau on Nov 26.
Gome announced the following day that Huang's and Zhou's corporate responsibilities would be suspended while investigations into their alleged economic crime continue.
The company appointed its president Chen Xiao as the acting chairman and Fang Wei as the acting chief financial officer, respectively.
The company added that it had set up a special committee to monitor and assess its financial condition and operations.
It also said the preliminary investigation indicated that there was no evidence of misappropriation of the company's assets.
Gome also plans to hire external auditors to conduct a risk assessment and review related-party transactions and internal control systems.
Chen earlier dismissed speculations that Gome will sell its shares to Best Buy. "The company has never heard of such a thing. It's just a rumor," Chen said.
However, there is speculation that many investors are eying the mainland largest electrical appliances maker. Possible suitors include private equity fund Warburg Pincus, and Citigroup.
(HK Edition 12/25/2008 page2)