The trading of shares in China Gas Holdings, a natural gas distributor part-owned by the Oman Oil Company, will remain suspended after the company said two of its executives were detained by police.
China Gas officials said in a statement to the Hong Kong stock exchange yesterday that Liu Ming Hui, the managing and executive director, and Huang Yong, the executive president, had been detained by police in China's southern boomtown of Shenzhen since December 18 for suspected "embezzlement of the assets of an organisation in which they have duties".
China Gas said it found no indication of any noticeable irregularities involving recent material movement of cash or funds after a preliminary internal review. Trading in China Gas has been halted since December 20 and will remain suspended, it said. The company has 114 gas projects in China.
The stock was last traded at HK$3.39 on December 17. It lost 20 per cent in value last year.
"No records or files of the group have been confiscated and none of the members of the group have been investigated or notified of any investigation by any governmental authorities in the PRC [People's Republic of China] in relation to such matters," China Gas said.
China Gas is 9.7 per cent owned by South Korea's SK Group, the parent of SK Holdings. Other shareholders include the state-owned Sinopec, the Indian state gas firm GAIL and the Oman Oil Company.
China Gas raised about HK$3.1 billion via a share placement in October to cut debt.
The net proceeds received from the placings have not yet been utilised and are being held in the company's bank accounts in Hong Kong, China Gas said in its statement. It was also granted a US$200 million credit facility by the Asian Development Bank in October for a new project.
The company had bank loans and other loans amounting to HK$14.7bn at the end of September.
"Since the Shenzhen PSB [public security bureau] has not permitted the Chinese legal counsel to make contact with Mr Liu or Mr Huang, the company is unable to obtain further information directly from Mr Liu and Mr Huang about the incident," China Gas said.
* with Reuters