China stainless steel mogul fights to avoid a second collapse
A debt crisis is threatening the future of one of the world’s top stainless steel producers, Jiangsu Delong Nickel Industry.
China Mining Resources (HKSX:340) has revealed that its Hong Kong-based offices were raided by the Independent Commission Against Corruption on January 15 in relation to a recent botched acquisition bid.
The South China Morning Post reports that according to the Hong Kong-listed rare earth miner the raid by ICAC saw the seizure of books and records relating to the failed takeover.
China Mining Resources said that because the acquisition did not come to fruition, the company’s board does not feel the seizure of materials will have an “adverse affect on the operations or financial position of the company.”
China Mining Resources had previously sought to obtain a 77.8% stake in mainland seafood company Win Power Investment for a consideration of HKD$700 in January of 2010, yet the deal was subsequently cancelled due to China Mining’s dissatisfaction with the due diligence conducted on Win Power’s financials.
In November 2011 Fujian Yuansheng Foods Industry, a Win Power subsidiary, and Fujian Yuansheng founder Lin Ming sued China Mining along with 27 counter-parties for 1.59 billion yuan in damages, alleging that they had conspired to obtain ownership of the company’s assets.
ICAC was also investigating allegations that former directors of China Mining had received bribes in exchange for compelling the company to take up a 57% stake in Lead Sun Investments, a Chinese titanium company, back in 2006.
