Hangxiao suspends trading over hampered contract reports
Updated: 2007-07-10 13:50
Trading in Shanghai-listed Hangxiao Steel Structure Co was suspended Monday as the company was obliged to clarify media reports saying its contract, worth billions of United States dollars with the government of Angola, was under reconsideration.
The National Reconstruction Department of the African country has canceled some contracts with China International Fund Limited, which indicated other deals may be jeopardy, including Hangxiao's house construction agreement. The contract is worth 34.4 billion yuan (US$4.52 billion), China Business News reported, citing an insider with the fund as saying last week.
The report triggered Hangxiao to issue an urgent statement to the Shanghai Stocks Exchange that it will halt trading today to "clarify news reports."
On May 10, Hangxiao and its senior managers were fined about one million yuan for violating information disclosure rules by China's securities watchdog.
Shares of Hangxiao soared by the 10-percent daily limit for four straight days before the firm announced huge orders for building materials and services in Angola.
The company was accused of not releasing information about its negotiations with Angola until the two parties had signed a draft agreement. This violated rules on information disclosure, said the stock exchange in a statement on May 11.
The company will only be allowed to resume stock trading after an official public explanation about its investment situation in Angola, according to China's stock rules.
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