* Chinese motor maker goes private at $24 a share
* Stock fell to $5.82 per share in the summer
By Emily Flitter
NEW YORK, Oct 29 A yearlong struggle by
U.S.-listed Chinese company Harbin Electric to take
itself private amid fraud allegations ended on Saturday when
shareholders voted to be bought out for $24 a share.
Nearly 91 percent of the electric motor maker's
shareholders voted for the deal to merge with privately held
Tech Full Electric Co, a company statement said.
Harbin, whose shares closed at $22.55 on Friday, said it
expected to close the deal within a week.
"This has been the most bizarre series of events," said
Matthew Giffuni of Quadre Investments LP, a Harbin shareholder
who voted for the deal, acknowledging the accusations by short
sellers were unsettling. "Once they filed the primary proxy,
people were more comforted."
Harbin's U.S. stock took a beating earlier this year after
analysts at Citron Research, run by California-based investor
and notable short seller Andrew Left, claimed the Chinese
company overvalued itself in its $750 million buyout proposal
and that it had misstated its operating results.
Harbin was one of numerous Chinese stocks listed in North
America through reverse takeovers.
A number of the companies were later accused of accounting
fraud. Numerous stocks were later delisted and regulators are
investigating in Canada and the United States.
Harbin shares hit a 52-week low of $5.82 on June 16 before
recovering. They continued to rise but for months were still
priced at a substantial discount to the $24 buyout price.
Citron on Thursday officially ended its efforts to force
Harbin's shares lower, publishing what it called its "final
word" on the company.
Giffuni said he hoped the short sellers would be
investigated by the authorities.
"The Justice Department needs to go after this," he said.
The shareholders also agreed to give Harbin's U.S-based
executive vice president, Christy Shue, an exit package worth
nearly $2.3 million, a company spokesman confirmed.
Around a dozen shareholders attended a meeting at the Park
Avenue offices of Loeb & Loeb LLP to vote in person, although
not everyone backed the deal.
"They took this company out at fraud prices," said a
shareholder who asked not to be named but described himself as
"a money manager with a modest position in the shares."
"This represents the weakness and the wishy-washiness of
the investors," he said, adding he had wanted a minimum price
of $28 a share for the buyout.
Fred Farkash, an individual shareholder, said he was happy
with the outcome but disappointed by the meeting itself.
Farkash said he wanted to meet Harbin's chief executive
Tianfu Yang but the only executive who attended was Shue. Yang
and his board phoned in from China and Farkash said most of the
meeting took place in Chinese.
"Tianfu wasn't there, there was no presentation, it was a
little disappointing," he said. "But I was well compensated."