China Rongsheng Heavy Industries Group Holdings Ltd. (01101.HK) faces fresh uncertainties as a potential investor in the debt-laden company is said to have been detained by Beijing police.
Wang Ping, owner of private-equity firm Kingwin Victory Investment Ltd., is believed to have been placed under detention last month on some criminal allegations, the Hong Kong Economic Journal reported Thursday.
Wang was planning to invest in Rongsheng, a shipyard that has run into financial trouble and is restructuring its business.
Under a deal outlined in October last year, Wang’s private-equity firm was to become the second largest shareholder in Rongsheng, with 16.73 percent stake.
Rongsheng is seeking fresh funds for its Jiangsu shipyard. The company also bought stake in a Kyrgyzstan oilfield in a bid to diversify its income and offset the impact from low cycles in its core business.
Wang’s firm agreed to pay HK$510 million for Rongsheng warrants, a move that was expected to pave for total investment of HK$3.2 billion in the Chinese shipyard.
The criminal allegation is reportedly related to an acquisition deal targeting construction and home decoration material seller Orient Home Furniture Building Material Co. Ltd.
Translation by Vey Wong
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