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China Unicom shares still halted, as details of US$12b fundraising disputed

[HONG KONG] China Unicom's two main units said on Thursday their shares would remain suspended until further notice, one day after the group announced it was raising US$11.7 billion from investors including Alibaba Group and Tencent Holdings.

No reason was given for the continued suspension, which runs counter to expectations that trading would resume soon after details of the fundraising were released. China Unicom's Hong Kong shares were suspended on Wednesday, while trading in its Shanghai-listed shares has been halted since early April.

One of the investors named by China Unicom denied on Thursday that it is participating in the deal.

And, adding to market confusion, the deal announcement was taken down from the Shanghai bourse website although it remained on the Hong Kong bourse's website as well as the website of the Hong Kong unit.

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An official at China Unicom Hong Kong Ltd said the announcement was taken down from the Shanghai exchange due to "technical issues", but he did not elaborate.

China United Network Communications, the Shanghai-listed unit, did not immediately respond to Reuters requests for comment. The Shanghai bourse also did not immediately respond to a faxed request for comment.

One of the 14 investors which were named by China Unicom's Hong Kong unit, rail equipment maker CRRC Corp Ltd, denied making an investment through the purchase of shares in the Shanghai-listed unit.

"According to verification results, the company did not participate in the afore-said subscription," it said in a notice to the stock exchange, referring to media reports about it being one of the investors.

CRRC officials in Hong Kong did not immediately respond to a Reuters request for comment.

The China Unicom fundraising is part of Beijing's push for state-owned enterprises to be revitalised with private capital.

China Unicom is among the first batch of state-owned enterprises slated for mixed-ownership reforms.

The funds would be raised by the group's Shanghai unit via sale of new as well as existing shares, and investors will get a combined 35.2 per cent stake in that company and will be allotted three board seats.

Edison Lee, analyst at brokerage Jefferies, said the flip-flop regarding the China Unicom deal announcement does not "affect the overall ownership reform plan". "But yes, it is weird. The announcement appears rushed," he said.

Jefferies earlier said in a note the diversified nature and representation of private investors was unprecedented for a Chinese state-owned enterprise, signifying the degree of support Unicom receives from the government.