Brilliance- China Automaker - Takeover Talk Suspends Trading

HONG KONG, Nov 11, 2002; Reuters reported that trading in the shares of Brilliance China Automotive Holdings Ltd <1114.HK>, China's largest van maker, was suspended on Monday following a weekend newspaper report that the Chinese government will soon take over control of the company.

The Hong Kong stock exchange did not give any details in a statement on the suspension. Brilliance China officials were not immediately available for comment.

Shares of Brilliance China -- which is setting up a joint venture with German luxury automaker BMW -- finished at HK$0.99 on Friday, up 10 percent in the past month.

The Hong Kong Economic Times quoted a senior official of the province of Liaoning, the home base of Brilliance China's production facilities, as saying the Liaoning government would take back its ownership in Brilliance China by the end of the year.

It said the move would be made according to Hong Kong law.

Company watchers have said the plan had been anticipated by the market.

Currently, the largest shareholder in Brilliance China is the Chinese Financial Education Development Foundation, which has a 39.45 percent stake.

The foundation used to be controlled by Yang Rong, the former chairman of Brilliance China who is wanted by Chinese police for alleged involvement in economic crimes.

Yang, who has said he is innocent, is believed to be in Los Angeles. There is no U.S.-China extradition treaty.

Brilliance China said late last month it would hold a special general meeting on November 22 to vote on whether to oust Yang as executive director of the company. Yang was ranked by the Forbes magazine as China's third richest man in 2001.