Gome Electrical Appliances Holdings Ltd seems to be the final winner of a 9.02-percent stake in Sanlian Commercial Co, reinforcing its domination of the company.
Beijing Zhan Sheng Investment Co bought 22.76 million shares in Sanlian at 5.94 yuan (87 US cents) apiece in an auction on Tuesday to become Sanlian's second-largest shareholder after Gome.
Sanlian Group, the former second-largest shareholder of Sanlian Commercial, has offered five auctions for the 9.02-percent stake.
Although Gome's spokesman He Yangqing said Zhan Sheng is an independent company and Gome has no connection with the 9.02-percent stake, Gome is still widely seen as the real owner based on the previous closeness of the two companies.
Last year, Gome financed Zhan Sheng's 3.6-billion-yuan acquisition of Beijing Dazhong Electronics Ltd, with an option to buy Dazhong later for itself. Acquiring existing appliance retailers through a third party has been one of Gome's strategies for grabbing the lion's share of China's market.
In February, Shandong Longjidao Construction Co bought a 10.7-percent stake in Sanlian for 541 million yuan to become the largest shareholder, and Gome acquired all of Longjidao several days later to become the real owner of the Sanlian stake.
"We will audit Sanlian Commercial's assets after forming a new board of directors since the ownership of stakes is clear now," Gome's He told Shanghai Daily.
He said a listed company should be responsible for the completeness of its assets, including brand and logistics, so they will be called to account if an audit uncovers problems.
Gome has complained before that Sanlian only owns the rights to use the brand of franchised stores, but doesn't have other quality assets in areas like procurement and after-sales service.
Sanlian was suspended from trading pending an announcement and closed at 9.25 yuan a share on Monday.
(Shanghai Daily July 31, 2008)
