Ping An Insurance (Group) Co's funding plan is unlikely to be affected by a routine tax inspection, its senior manager said yesterday in Shanghai following reports that it could be delayed until July.
The State Administration of Taxation starts a four-month tax inspection on Ping An next Monday.
"The tax-inspection date was set last year and is not aimed to thwart our fund-raising plans" said Dominic Leung, chief insurance officer of Ping An in Shanghai.
Leung said the date, which falls on two days before its shareholders' meeting where investors will vote on funding plans, is just a coincidence. "We will pick the most suitable time for the fund-raising if the plan is finally passed," he said.
Even if shareholders support the plan next Wednesday, Ping An has to gain regulatory approval for the sale.
Shares of Shenzhen-based Ping An have lost 28 percent since it announced the plan in January to sell up to 1.2 billion new yuan-backed A shares, or 14 percent of its expanded capital, plus 41.2 billion yuan (US$5.76 billion) of six-year convertible bonds with detachable warrants.
The whole plan, on paper at the time, would have helped the insurer gain about 160 billion yuan based on market prices. However, the scale has already diminished by almost a third due to the shaky market.
Ping An shares ended at 70.50 yuan yesterday, down 1.84 percent.
Investors are selling shares in the firm over concerns that a larger supply will dilute their holdings. Ping An, the first listed firm to announce refinancing plans this year, also caught the eyes of regulators.
The China Securities Regulatory Commission said on Monday it will "strictly scrutinize" refinancing plans and warned Chinese companies against making big share issues that could hurt the stock market.
The 21st Century Business Herald yesterday quoted sources as saying the fund-raising may be delayed until July due to the tax inspection.
Another prospect was also raised yesterday. Ping An may first sell its convertible bonds to raise 41.2 billion yuan and then consider the share-sale plan under market pressure, Shanghai Securities News reported yesterday.
(Shanghai Daily February 29, 2008)
