Huobi Acquires Controlling Interest of Hong Kong-based Pantronics Holidings, Ltd.Scroll Down
Huobi, a Chinese cryptocurrency exchange, has acquired the controlling interest of stock in the Hong Kong company Pantronics Holdings Ltd. It got the controlling stock share through a back door listing deal. A back door listing, which is also referred to as a reverse takeover or a reverse IPO, is a process that allows a private company to buy a publicly traded company without going through the public offering process, regulatory requirements or due diligence. When the transaction concludes, the private buyer gets automatic inclusion on the stock exchange. Huobi was able to require 73.73 percent of Pantronics Holdings Ltd. This makes the cryptocurrency exchange the majority controller of the electrical parts manufacturer. Pantronics Holdings Ltd. halted the trading of its shares on the Hong Kong Stock Exchange on August 22, 2018 under the guidance of rule 26, which states the Hong Kong codes on takeovers and mergers. The CEO of Huobi, Li Lin, was directly asked if the exchange planned to conduct a back door listing. The CEO responded that it was just a rumor and that the business is not currently globally compliant. If so, that would make a back door listing a difficult process to complete. Li Lin added that the traditional financial marketplace would embrace the blockchain and cryptocurrency economy in future years. A July 30, 2018 update of the Hong Kong Stock Exchange rules suggests that the organization is working on measures to clean up the market and the quality of the participating companies. Some of those rules will offer more guidance on the back door listing process. The Hong Kong Stock Exchange's leader explained that while the exchange allows a back door listing, they want to make sure that the quality of the assets go through a proper vetting process and that buyers do their due diligence. According to Con Market Cap, Huobi tokens are trading at $2.35. This amounts to an 8 percent gain over one day since the back door listing transaction concluded. The Pantronics Holdings Ltd.'s market capitalization rate is currently in excess of HKD 926 million, or US $118 million.