The ranks of privately controlled companies on mainland stock markets have expanded with a bowling-equipment maker taking control of a troubled listed firm, Shanghai Forever.
Privately held Shanghai Zhonglu Industrial has gained a backdoor listing on the Shanghai stock exchange by acquiring 54 per cent of the state-run bicycle producer for 10 million yuan (about HK$9.37 million). The man behind the success at Zhonglu is Chen Rong, a self-made entrepreneur with little formal education who made millions in the early days of the mainland's stock market frenzy.
Mr Chen moved into the bowling business when he saw an opportunity in the spreading craze. He was ranked 39th by Forbes magazine on its list of the mainland's wealthiest last year.
China has long kept access to the stock market as a special privilege reserved for state companies.
Although Beijing has been easing its policy of official favouritism towards state firms, privately controlled companies still account for only a tiny proportion of the 1,100 corporations listed in the mainland.
A number of private firms, in addition to Zhonglu, have turned to backdoor listings in order to speed up access to the stock market. Among them is the Sanlian Group of Shandong, which has been trying to buy control of Zhengzhou Baiwen, an ailing retailer.
Forever Bicycle has domestic currency A shares and foreign currency B shares, but both classes of its stock are under special trading curbs because the company has lost money for three consecutive years.
