The Hisense Group, a China-based white goods manufacturer, said it purchased a 26.43-percent stake share of refrigerator maker Guangdon Kelon Electrical Holdings for 680 million yuan (approx. U.S. $85 million), according to the Shanghai Daily.
The Guangdong Greencool Enterprise Development Co., the company of former Kelon chairman Gu Chujin that holds the 26.4-percent stake, agreed to the purchase, according to Hisense.
Under the agreement, Hisense will submit a down payment of 500 million yuan (approx. $62.5 million) within 7 business days after the agreement takes effect.
After the down payment is received, Kelon said the court will freeze the account until the shares are transferred to Hisense, and Hisense will then submit the remaining 180 million yuan (approx. $22.5 million) within another 7 days. The 180 million yuan includes a 20 million yuan deposit in a fund controlled by both Hisense and China General Chamber of Industry and Commerce.
A Kelon spokesperson said the agreement is subject to approval of several agencies, including the China Securities Regulatory Commission (CSRC).
The CSRC started to investigate Kelon in May 2005, after a 60-million-yuan (approx. $7.5 million) deficit in its 2004 annual report was reported. The company's former chairman Chujun and six other senior executives were arrested in September for embezzling company money. The company's stocks were suspended on four occasions by the Shenzhen Stocks Exchange and the Hong Kong stocks exchange last year.
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