Soho China’s CFO says he investigated insider trading Mingtiandi

Pan Shiyi and Zhang Xin were spotted at the US Open last September

Soho China confirmed on Thursday afternoon that its chief financial officer, Ni Kuiyang, was under investigation for insider trading in the developer’s Hong Kong-listed shares.

The company made the admission after news of the probe surfaced on Chinese social media this week, with netizens adding that the probe also included other senior officers from Soho China, with the developer denying the reports. of a larger investigation.

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Soho said the company and its executives were unaware of the circumstances of the alleged insider trading and were not involved in the illicit practices.

Posts on China’s Weibo platform alleged that Ni Kuiyang, who had served as Soho China’s chief financial officer since October 2018, profited from inside information regarding Blackstone’s proposed $3 billion takeover of the mainland business developer. last year to make illicit profits. Ni was reportedly taken to social media by police, with Soho saying she “has been and will be unable to play her part”.
as the company’s chief financial officer until the investigation is complete. »

Redemption failed

Zhang Xin and Pan Shiyi’s attempt to sell Soho China, which was scuttled when China’s State Administration for Market Regulation (SAMR) failed to certify the deal did not break rules mainland anti-monopoly, has been the subject of controversy since shortly after it was announced on the Hong Kong stock exchange in June last year.

Galaxy SOHO

Galaxy SOHO in Beijing

As managing director and chairman of Soho, respectively, Zhang and Pan were accused of trying to sell the company as part of an exit plan from China, with the pair seen attending the tennis tournament in the US Open in New York last September while the continent remained confined.

Chinese netizens were quick to criticize Soho for not announcing the alleged investigation in a timely manner, with Zhang and Pan previously being criticized for being in the United States for much of the past two years, even as the Hong Kong-listed developer has been the target of a series of legal charges by mainland authorities since late 2021.

After establishing a portfolio of nine commercial properties covering 826,406 square meters (8.9 million square feet) in Shanghai and Beijing, Soho has not purchased any new projects since 2014 and reported a loss attributable to shareholders of 131 million RMB ($19.6 million) in 2021.

Targeted Developer

After Mainland authorities sounded the proposed sale of the Soho assets in September, several property management companies owned by the developer were charged with defrauding customers of utility charges and fined a total of $86, 64 million RMB for “violation of electricity price” in seven of the company’s projects at the end of 2021.

Then, in March this year, municipal authorities in Beijing said they had imposed a combined fine of RMB 115 million on 15 of Soho’s property management companies in the city, according to local reports citing government announcements. .

Also in March, Beijing Jianhua Real Estate, which is controlled by Pan Shiyi, was fined RMB 709 million for tax evasion.

Now 44, Ni Kuiyang is a member of the China Institute of Chartered Accountants and joined SOHO China in July 2008. Soho said that according to the investigation, she transferred her responsibilities on an interim basis. , while adding that the investigation is considered to have no negative impact on the operations of the developer.

Thwarted in its attempt to sell its portfolio of office buildings last year, Soho China put 32,000 square meters of strata title assets in Beijing and Shanghai on the market in March at a 30% discount and has promised brokers commissions of 4% on any transfer. So far, the company has yet to report any sales resulting from this exercise.

Note: This story has been updated to include Soho China’s statement regarding the investigation.

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