Trading Halted In Brilliance China Shares

HONG KONG, Dec 18, 2002; Reuters reported that trading in the shares of Brilliance China Automotive Holdings Ltd, China's largest van maker, was suspended on Wednesday, amid speculation that the firm was likely to unveil a new ownership structure.

The company said in a statement to the stock exchange that it was halting trade pending the release of price-sensitive information.

Brilliance said in November that the Liaoning provincial government, in northeastern China, is in talks to buy all or part of a 39.45 stake owned by its largest shareholder, the Chinese Financial Education Development Foundation.

"I think probably the provincial government will take over the stake in Brilliance and they will disclose the terms. There are a number of issues they have not resolved. Management changes and the terms of a takeover," said Grace Mak, analyst at Merrill Lynch.

The company was not immediately available for comment.

The foundation was formerly controlled by tycoon Yang Rong, Brilliance's former chairman, who is wanted by Chinese police for alleged economic crimes.

Yang who has said he is innocent of the charges, has not been seem in public since June and is believed to be in ill health in the United States. There is no U.S.-China extradition treaty.

Shares of Brilliance China were unchanged at HK$1.45 on Wednesday morning prior to the suspension, they have gained 42 percent in the past month and 35 percent in the past three months as the firm's outlook improves and car sales in China skyrocketed to more than one million this year.

The takeover plan would also remove lingering uncertainties hanging over the firm following the ouster of Yang, analysts said.

"It is positive this development. There are still a few more things we need to know, such as will there be any more changes if the provincial government comes in?" Mak said.

Shareholders voted to remove Yang from the board of directors late last month.