China Rongsheng Suspends Warrant Issue as Investor Detained

Rongsheng “has no information as to the details of the incident and has been unable to contact Mr. Wang Ping, which casts doubt” on Kingwin Victory’s ability to follow through on the investment by the March 31 deadline, Rongsheng said Wednesday in a statement to the Hong Kong Exchange.

　　The Beijing Public Security Bureau didn’t immediately respond to a faxed request for comment, and Wang couldn’t immediately be reached. Shares of the company fell as much as 8.1 percent in Hong Kong trade to HK$0.68 on Thursday, down from more than HK$8 in 2011. It was down 5.4 percent as of 9.35 a.m. local time.

　　Cancellation of the warrant sale raises questions about how Rongsheng will now be able to raise funds.

　　“They really need that money,” said Park Moo Hyun, an analyst at Hana Daetoo Securities Co. in Seoul.

　　Rongsheng has run into financial trouble amid competition with state-owned yards that have government backing and easier access to financing. The company is also seeking investment in its Jiangsu shipyard and bought a stake in an oilfield in Kyrgyzstan as part of efforts to restructure its business.

　　Shanghai-based Rongsheng said last August it’s entering the energy business and is issuing new shares so it can buy a 60 percent stake in a Kyrgyzstan oilfield. It later said it’s seeking to identify new investment opportunities outside China,N including in Central Asia.