August 4, 2019 / 11:28 AM / 17 days ago

Aluminum firm Zhongwang seeks advice after U.S. smuggling charges

BEIJING (Reuters) - China Zhongwang Holdings said on Sunday it was seeking legal advice after the company and its controlling shareholder, Liu Zhongtian, were indicted on charges they evaded $1.8 billion of tariffs by smuggling aluminum into the United States.

Zhongwang said in a statement to the Hong Kong stock exchange that it and Liu had still not been served with any notice in relation to the legal proceedings.

“The company takes seriously any allegations that it may have violated any law, and is seeking legal advice in relation to the alleged proceeding,” it said in the statement, adding it would keep shareholders informed of further developments.

Zhongwang is based in northeast China’s Liaoning province and makes aluminum products for the automotive and construction industries.

U.S. prosecutors have alleged that companies affiliated with Liu used ports in the Los Angeles area to import aluminum from China that was disguised as a finished product not subject to duties, before making bogus sales.

Zhongwang has previously described smuggling allegations as “misleading” and “without any factual basis.”

Liu stepped down as Zhongwang chairman in 2017 but remains its largest shareholder with a 74.16% stake, according to Refinitiv Eikon data.

“If the allegations were proven in court, the company could face monetary penalties,” Zhongwang said in the statement.

Zhongwang’s share price fell by 14.2% on Thursday, after the indictment was reported, and fell a further 7.6% on Friday to end the week on HK$3.18 ($0.4062), its lowest close since October 2015.

In its statement, Zhongwang said its board believed the legal proceedings had so far had no material adverse impact on the company’s operations or its financial condition.

“The company continues to operate as normal,” it said, adding that a further announcement would be published if the situation changes.

Reporting by Tom Daly and Gao Liangping; editing by David Evans and Jane Merriman

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below