Zhao Weiguo, Chairman of Tsinghua Unigroup, a chip producer and leading digital infrastructure and services enterprise, said on Wednesday via a statement of his holding firm that he opposed a restructuring plan announced by Tsinghua Unigroup, casting doubt over the plan which may directly result in a state asset losses worth of 73.4 billion yuan ($11.53 billion), according to media reports.
Zhao announced his rejection of the plan via a statement released by his holding firm-Jiankun, which owns 49 percent of Tsinghua Unigroup, domestic business site nbd.com reported on Thursday, adding that Zhao has already reported the potential loss of state assets to responsible authorities including the Central Commission for Discipline Inspection.
Tsinghua Unigroup released a statement on Tuesday stating that JAC Capital and Wise Road Capital have formed a consortium and will take the lead as a strategic investor in the substantial merger and reorganization of seven companies including Tsinghua Unigroup.
Zhao said in an interview with nbd.com that Tsinghua Unigroup will be separated from the supervision typically applied to state assets after entering the restructuring process, adding that there are procedural problems, while also expressing doubts over the consortium’s ability to execute the reorganization.
“Both JAC Capital and Wise Road Capital are asset management firms, so there are doubts over their ability to [manage] a takeover,” Zhao said
During the interview with nbd.com, Zhao noted that Jiankun believes Tsinghua Unigroup is facing a liquidity crisis rather than insolvency, and that the appraiser had underestimated the company’s assets.
According to Zhao, the company should first ask professional state-owned institutions for an asset evaluation, and that strategic investors should be involved after the asset evaluation was made available.
Tsinghua Unigroup said in July that creditors applied for bankruptcy in court and reorganization was due to the company’s inability to pay off outstanding liabilities and lack of solvency.
Later in August, a Beijing court ordered the reorganization of Tsinghua Unigroup and six related companies, while appointing Tsinghua Unigroup to lead the reorganization.
The share price of Tsinghua Unigroup dropped 6.80 percent as of press time.
Workers make semiconductors at a company in Guiyang, Southwest China’s Guizhou Province on Tuesday. In recent years, China has witnessed the blossoming of its chip industry, thanks to generous government policy support, as well as enthusiastic entrepreneurs and venture investors. Photo: cnsphoto
