Chinese court freezes shares of Billionaire Zheng Jindong in Suning.com amid cas...

Chinese court freezes shares of Billionaire Zheng Jindong in Suning.com amid cash crisis

Chinese court freezes shares of Billionaire Zheng Jindong in Suning.com amid cash crisis

June 16, 2021 6:00 pm

Cash strapped retailer Suning suffered another financial blow as a Beijing court frozen 5.8% of the Suning.com’s shares owned by founder Zhang Jindong.

Detail: Zhang is the controller shareholder of Suning.com, the e-commerce arm of Chinese retailer Suning Holdings Group.

Beijing second intermediate court has frozen 540.2 million shares owned by Zhang, which is equal to more than a quarter of the total shares held by Zhang Jindong, who owns 21% of the Suning.com’s shares.

After the announcement, shares of Suning.com dropped 10% on Tuesday, which is the maximum daily limit for a company’s shares trading on Shenzhen Stock exchange.

The court’s move indicates that the liquidity crisis at Suning Holdings continued despite billions of yuan of stated-funded bailouts that the company received in May.

Context: The liquidity crisis of Suning.com burst out last year when Suning booked consecutive losses in its core retail business and the debit scaled up amid aggressive expansion into multiple sector including retail estate, telecom, football clubs.

In December, 2020, Zhang Jindong pledged all of his shares in Suning Holdings Group to Taobao, according to the credit information system report.

In February, Suning.com announced a USD2.3 billion share sale of nearly a quarter of the company to state-controlled entities in Shenzhen, which is part of a state bailout.

In 2020, Suning.com booked CNY4.3 billion in net loss attributable to shareholders, dropped significally from a net profit of CNY9.8 billion in 2019.

SHARE