China bans billionaire actress from securities market for five years
 
Zhao Wei has been known as the female version of Buffett in China’s show business. Photo: AFP
 
One of China’s wealthiest actresses, along with others, has been barred from the country’s securities markets for five years for “seriously misleading the market” under a ruling by China’s financial watchdog last week.
 
Zhao Wei, or Vicki Zhao, and her husband, Huang You Long, tried to buy 29.1 percent of Zhejiang Wanjia Co in December last year, through a company they founded in last November. The deal, however, failed due to lack of financing. Zhejiang Wanjia was later taken over by another investor and renamed Zhejiang Sunriver Culture Co.
 
The deal drew China’s financial watchdog’s attention right after its announcement last year due to information disclosure and financial ability. 
 
The company founded by Zhao and Huang, Tibet Longwei Culture Media Co, was supposed to pay 3 billion yuan for the 29.1 percent stake in Zhejiang Wanjia, but they would only offer 60 million yuan and the rest of the money was to be borrowed, the China Securities Regulatory Commission (CSRC) said, according to the filing released on the website of Shanghai Stock Exchange last Friday (Beijing time).
 
According to the filing, Longwei was set up with an unfunded 2 million yuan capital claim, with no asset, revenue and profit. The share transfer was reduced to 5.0396 percent from 29.1 percent during December 23, the day the deal was initially signed, and February 13, 2017 after Longwei failed to raise enough money from financial institutions. On April 1, Sunriver announced that both parties agreed to cancel the deal.
 
According to an earlier filing, around 1.5 billion yuan was to come from Tibet Yinbixin Asset Management for the acquisition. The asset manager had been connected with the investment by companies linked to Chinese tycoon Xiao Jianhua who went missing in Hong Kong in January, Jiemian reported. Xiao’s company has denied working with Zhao on the deal, according to the China Economic Net.
 
The CSRC found that Zhao and her company had violated disclosure rules by announcing merger and acquisition intentions at a time when they lacked sufficient resources, or support from financial institutions, “seriously misleading the market with fake information,” according to the filing. 
 
After Longwei and Wanjia announced their deal in late December, Wanjia’s stock price went up to 25 yuan in January and then dropped to 9.03 yuan in late July. 
 
The CSRC said that the bidder’s actions had “severely impacted market order, hurt medium and small investors’ confidence in the market, and undermined fairness, justice and openness of the market.”
 
Zhao, her husband Huang Youlong, and the owner of Wanjia were each fined 300,000 yuan ($45,000), according to the filing, while Sunriver and Longwei each received 600,000 yuan penalty, the filing said.
 
The CSRC’s ruling comes at a time when China has reiterated the need to safeguard financial stability with zero tolerance for capital market manipulators. In February, Liu Shiyu, chairman of the CSRC, pledged that the regulator would continue to look into dubious takeover deals involving “barbarians, monsters and big crocodiles.”
 
The ruling made a headline on China’s social media over the weekend as Zhao is one of the most famous actresses in China and has been known as the female version of Buffett in China’s show business. 
 
Zhao, 41, came into national prominence in 1998 for starring in the hit TV drama Huanzhu Gege, or My Fair Princess, along with the now world-famous actress Fan Bingbing. For that role she won China’s Golden Eagle Award, the equivalent of America’s Emmy Award. She went on to win more awards for appearing in other films, such as John Woo’s Red Cliff, Warriors of Heaven and Earth and the Painted Skin.
 
Beyond acting, her career also extends into other fields like singing, directing and charity. In 2013, Zhao made her directorial debut with the youth romance movie So Young which became a big box office hit. 
 
As a business woman, Zhao’s biggest deal was her December 2014 investment in Jack Ma’s Alibaba Picture Group, purchasing a 9.18 percent stake in Alibaba Pictures for $400 million. Six months later, Alibaba Pictures’ market cap soared to $9.6 billion, leaving the couple with a stake worth $762 million, according to a report by Forbes in 2015. Combining that windfall with their other holdings, the couple's net worth has now topped $1 billion, the report said.

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