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Jailed Chinese tycoon's gains reaching US$1b in rally
[SHANGHAI] Being behind bars hasn't stopped the founder of one Chinese appliance seller from booking gains approaching US$1 billion in Hong Kong's surging stock market.
Huang Guangyu, the businessman jailed in 2010 for bribery and insider trading, has seen the value of his stake in Gome Electrical Appliances Holding Ltd more than double by about US$873 million since April as mainland Chinese investors take advantage of reduced trading restrictions and pour money into the former British colony.
The Beijing-based electronics retailer was, as of the close of trading yesterday, one of the Hang Seng Composite Index's best-performing stock this quarter since the H-share rally began April 8. The company was boosted by perceptions that it's undervalued compared with rivals, according to Citigroup Inc and CCB International Securities Ltd recently.
"I wouldn't be unhappy that my wealth has doubled, but equally it's nothing to do with anything the company has done," said Andrew Sullivan, head of sales trading at Haitong International Securities Group Ltd in Hong Kong. "It's all to do with the perception of the company." Mr Huang's windfall is another consequence of market rally that has inflated the wealth of some of Asia's richest men to dizzying heights. As of Wednesday's close, Dalian Wanda Group Chairman Wang Jianlin had seen his wealth surge 45 per cent this quarter to US$43.8 billion, while Fosun Group Chairman Guo Guangchang gained 33 per cent to US$8.4 billion, according to the Bloomberg Billionaires Index.
Gome's shares have soared 110 percent to HK$2.35 since April. That added HK$6.77 billion (US$873 million) to the value of the 32.4 per cent stake Huang holds with his wife, Lisa Du Juan, according to data compiled by Bloomberg.
Gome closed 2.6 per cent higher by the end of trading in Hong Kong, and had risen as much as 6.6 per cent after Hexun.com reported Huang could soon be eligible to be released on parole as he nears the mid-point of his jail term.
Mr Huang, who was once China's richest man, was sentenced to a 14-year prison term. Despite a failed post-conviction bid to win control of Gome's boardroom, Mr Huang and his wife remain the company's largest shareholders, according to the company's 2014 annual report.