Chinese electrical appliance maker Guangdong Kelon Electrical Holdings Ltd. plans to auction the lion's share of its stake owned by its former chairman Gu Chujun, leaving the identity of the company's largest shareholder in doubt, local sources report.
Guangdong Greencool Enterprise Development Co., Gu's flagship company, holds a controlling 26.4 percent stake in Kelon.
Hisense Group, a Chinese appliance manufacturer, took over Kelon after Gu, along with several other executives, was detained amid allegations of embezzlement of Kelon's funds to buy other companies and providing fake financial reports.
Hisense earlier offered to acquire the stake with 900 million yuan (US$112 million) in cash, and later decided to reduce the price since auditing firms had found Kelon's assets to be much lower than that amount even with liabilities.
Failing to agree on a price with Hisense, Kelon and the local government has decided to put the controlling stake up for auction.
Officials said local appliance producers like Donlim Kahchan, Galanz and Midea had shown great interest in purchasing the stakes.
Kelon, based in the bustling southern province of Guangdong, was once an industry leader due to its smartly designed refrigerators, freezers, air conditioners and other small appliances.
(Xinhua News Agency March 15, 2006)
