Focus Media, an outdoor display advertising firm, has seen its plan to float shares inside China hit a snag as a shell firm targeted for backdoor listing has come under investigation, the Wall Street Journal reported.
Jiangsu Hongda New Material, the planned backdoor listing vehicle of Focus Media, said on Thursday that the China Securities Regulatory Commission is probing Hongda and its controlling shareholder Zhu Dehong, the report said.
The probes are due to Hongda’s alleged lapses in information disclosure and Zhu’s suspected violation of the securities law and regulations.
Hongda didn’t give other details on the probes, but said in a filing to the Shenzhen bourse that it is still holding talks with related parties for proposed asset restructuring with Focus Media, the Journal noted.
Focus Media, which delisted from the US two years ago, has sought to return to its home turf through what is known as a reverse merger.
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