4/20/2021 Financial News: CCP Will Suspend Trading If Foreign Accounts Cause Volatility, CCP Investigates Alibaba-Minmetals JV

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1.CCP will suspend trading if foreign accounts cause volatility in domestic stock market

CCP will take precaution measures to prevent massive foreign capitals in and out, Vice Chairman of the Communist China Securities Regulatory Commission (CSRC), Fang Xinghai said during the 2021 Boao Forum for Asia (BFA) on Monday, noting that if some foreign account funds enter the A-share market and cause significant market volatility, the CSRC will suspend their trading. As of March 31, foreign holdings accounted for 5 percent of the total CCP stock market, Fang unveiled.

In response to the regulatory issue of the CCP stock market listing in the US, Fang said: “There will be some problems during the cooperation, which is normal. For example, CCP stock listing in the US may face audit supervision, as the Private Columbaria Licensing Board (PCLB) inspects accounting firms, which the CSRC thinks is entirely reasonable. In the future, the Shanghai Stock Exchange may also host listings from US companies, which will also need to comply with CCP rules.”

2.CCP‘s market regulator investigates Alibaba-Minmetals JV

Minmetals Development Co Ltd, which operates an e-commerce subsidiary jointly with e-commerce giant Alibaba Group, is probed by top CCP market regulator for “concentration of business undertakings” – a type of monopolistic conduct under CCP law, according to a statement released by the listed company. According to the statement, the contract with Alibaba to cooperate on the Minmetals E-Commerce Co in 2015 is suspected of concentration of business undertakings, and so the State Administration for Market Regulation (SAMR) is now investigating the company. In May 2012, Minmetals Development launched an e-commerce business. In November 2015, Alibaba invested in the company and became the second-largest shareholder of the business as it held 44 percent of the company stake, the statement said. In December 2019, Alibaba transferred the 44 percent stake to E-Commodities, a company that is principally engaged in the processing and trading of coal and related other products and providing logistics services throughout the commodity supply chain, according to the statement.

According to government regulations, the definition of “concentration of business undertakings” involves activities banned by CCP’s anti-monopoly law, including “business operators acquiring the control rights from other businesses by acquiring equities or assets.”

3.CSRC strengthens the supervision on the investment of the system’s resigned personnel in the companies to be listed

The Communist China Securities Regulatory Commission (CSRC) said that recently, there were media reports that the resigning staff of the CSRC system suddenly bought shares in the companies to be listed, which aroused the attention of all parties. The CSRC attaches great importance to this. It adheres to the principle of preventing “making rich” in violation of laws and regulations, maintaining the “three public” order of the market, and strengthening the construction of a clean and honest administration of the supervision team. It adheres to the principle of problem orientation, drawing inferences from one instance, and comprehensively investigates the enterprises under examination. It also strengthens the verification and disclosure of those who have systematically left their jobs and become shareholders, and strictly checks and controls them. At the same time, it is making up for the shortcomings of the system Fan’s behavior of resigning employees as shareholders.

4.Rising fertilizer prices trigger a chain reaction

In Communist China, fertilizer prices remain high and the industry has serious credit sales problems. The cost of using chemical fertilizers this year is significantly higher than last year. The price of urea per ton is 2,630 yuan, an increase of 430 yuan per ton from last year. In recent years, the cost of chemical fertilizers has increased significantly in the process of agricultural production. The use of chemical fertilizers per mu for some crops increased from 192 yuan/mu in 2017 to 236 yuan/mu in 2020, an increase of 23%.

Meanwhile, in the production process, multiple factors such as rising raw materials and logistics costs have pushed up the price of chemical fertilizers. During the peak period of production, the prices of coal and sulphur, the raw materials for chemical fertilizer production, rose, leading to higher costs. Before the Spring Festival, the price of coal exceeded 1,000 yuan per ton, while the highest sulphur price in the first quarter was close to 2,000 yuan per ton.

5.The fourth Auction for LeEco founder Jia Yueting’s Beijing mall fails again

A commercial complex in Beijing owned by debt-ridden Jia Yueting, LeEco’s founder, failed to attract any bid on April 16, which is the fourth time this auction for the property has gone bad. The building for sale, Shimao Gongsan, is valued at around 2.929 billion yuan and is offered with a starting price of 2.05 billion yuan. Covering an area of 40,000 square meters and having an overall floorage of 212,000 square meters, the complex, which Jia bought in 2016 for approximately 3 billion yuan, is considered to be valuable compared with other assets owned by him. Jia has been struggling to convert assets like Shimao Gongsan into cash after a capital crunch in 2017. He has been blacklisted as a debt defaulter by CCP regulators for failing to repay billions of yuan of debts.

6.UK government intervenes in Nvidia takeover of chip designer Arm

The UK government is to examine the sale of computer chip designer Arm Holdings to a US company on national security grounds. Japan’s SoftBank intended to sell the UK tech company to Nvidia for about $40bn (£29.5bn). But Digital Secretary Oliver Dowden said he wanted the UK’s competition watchdog to assess its implications. “Following careful consideration of the proposed takeover, I have today issued an intervention notice,” he said. “As a next step and to help me gather the relevant information, the UK’s independent competition authority will now prepare a report on the implications of the transaction, which will help inform any further decisions.” Arm’s technology is at the heart of most smartphones and smart devices worldwide.

By 【Financial Team – Tracy】
News Collection: Wendy

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