Hong Kong to Hear Billionaire Huang’s Asset Freeze

Hong Kong’s High Court will hear on Sept. 8 the application by the city’s securities watchdog to prohibit the disposal of assets by billionaire Huang Guangyu, China’s second richest man.

The court ordered the former chairman of Gome Electrical Appliances Holdings Ltd., his wife Du Juan and the two companies through which he holds his stake in Gome not to remove from the city assets worth as much as HK$1.66 billion ($214 million), legal documents showed. The schedule of the hearing was posted on the Hong Kong judiciary’s Web site.

Gome fell 7.8 percent to close at HK$2.37 in Hong Kong trading, the most in almost eight months. The stock resumed trading June 23 after a seven-month trading halt following the detention of Huang, Gome’s largest shareholder, by Beijing police for unspecified “economic crimes.”

“The company was not approached by any regulators or judicial authorities relating to such a court order,” Gome said in a statement to Hong Kong’s stock exchange today.

The court order affects the “personal assets” of Huang and Du and doesn’t in any way relate to the company’s business, Gome said. Huang was the company’s chairman until January.

Hong Kong’s Securities and Futures Commission declined to comment on Gome’s statement, spokesman Ernest Kong said by phone. Beijing police didn’t reply to a fax sent seeking comment.

Gome was raised to “buy” from “hold” by Citigroup Inc. analysts Sandy Chen and Ross Wei in a note to clients. They more than doubled their target price to HK$3.

‘Better Earnings Outlook’

“We expect the stock to re-rate given lower financial risk and better earnings outlook on management efforts to change and government stimulus policy,” Chen and Wei said.

Gome, China’s second-biggest electronics retailer by market value, sought funding by selling 1.59 billion yuan ($233 million) worth of convertible bonds to an affiliate of Bain Capital LLC and shares to stockholders. Huang participated in the share offering that raised about HK$1.52 billion. link......