The latest:
Lithium compound producer
Ganfeng Lithium
Co. Ltd.
(1772.HK; 002460.SZ)
announced
Sunday it’s facing an investigation by the China Securities Regulatory Commission (CSRC) for suspected insider trading in an undisclosed mainland-listed stock on the secondary market. The CSRC decided to file a case against the Company on Jan. 24, 2022.
Looking up:
The company said the probe will not affect its normal production and operation activities, it will continue to pay attention to the progress of the investigation and actively cooperate with the CSRC.
Take Note:
The media
quoted
Ganfeng Lithium Chairman Li Liangbin as saying the main reason for the case being filed by the CSRC is that the company purchased shares of
Jiangxi Special Electric
(002176.SZ) in June 2020 during negotiations for a merger and acquisition.
Digging Deeper:
Ganfeng Lithium, which has been active in mergers and acquisitions in recent years, started to contact Jiangxi Special Electric on June 18, 2020 to discuss the merger and acquisition and purchased the latter’s shares on June 23, 2020. On Aug. 19, 2020, Ganfeng Lithium and Jiangxi Special Electric entered into a cooperation agreement, under which Jiangxi Special Electric would deliver its lithium salt business to Ganfeng Lithium for operation and production in the period from Oct. 1, 2020 to March 3, 2023, during which Ganfeng Lithium was required to pay Jiangxi Special Electric a cooperation management fee of 192 million yuan ($28.7 million). During the negotiation period, the share price of Jiangxi Special Electric rose by about 33%. However, on Oct. 29, 2020, Ganfeng Lithium announced that the two sides had terminated the cooperation because they could not reach an agreement on the technical transformation plan of the lithium salt production line.
Market Reaction:
The share price of Ganfeng Lithium fell on Monday. Its A shares softened 2.4% to 109.26 yuan at the midday break, while its Hong Kong shares also fell 4% to HK$82.85.
Bamboo Works is a premium business content provider with a strong focus on Chinese companies listed in the U.S. and Hong Kong. We aim at providing high quality, in-depth coverage to help investors and others to better understand this dynamic group of Chinese companies. Our platform aspires to help Chinese companies tell their stories in a credible way, offering them a new approach in their communications with stakeholders.
