Datang Telecom "fall"? Microelectronics 31.7% stake was transferred

In December 6th, the United States Warburg venture investment group (hereinafter referred to as "Hua Ping group") published a statement saying, in order to protect the interests of foreign companies, "according to the agreed terms to receive compensation, Datang Telecom (Hongkong) held by Datang Telecom (Holdings) (hereinafter referred to as" Datang Holdings ") equity." Datang holding Datang Telecom's highest quality assets - Datang Microelectronics Technology Co., Ltd. (hereinafter referred to as Datang Microelectronics) 31.71% stake.

Datang microelectronics is the core link of the development of the 3G industry chain of Datang Group, the main production enterprise of SIM intelligent chip. Such as the loss of control of the core link, Datang 3G development will be affected.

Meanwhile, according to the terms of the agreement signed between the two sides in the equity pledge, Warburg group will exercise the right to replace the chairman of the board, including the replacement of Datang microelectronics. The industry believes that this result will enable Datang Telecom Datang Datang control ability to be challenged.

So far, the breach of the incident broke the Datang Telecom and strategic partner Warburg group for more than two years of honeymoon.

A commitment to commercial contract disputes and disputes lawyer said, Datang Warburg has risen to the legal level, the event reflects the domestic enterprises recognize the existence of lack of Western business culture, domestic enterprises in legal risk management awareness.

Hua Ping.

"This fax shows that the cooperation between Datang and China has been completely broken." December 6th, a person who has long been concerned about the capital market, told reporters.

In November 24th, a report from the law firm of the fax sent to the headquarters of Datang telecom. Fax display, in view of Datang Telecom in the form of convertible bonds constitute a breach of contract, according to the relevant provisions of the Group signed by the two sides, and will have to respond accordingly.

Warburg group has taken measures, according to Datang Telecom (Hongkong) Co., Ltd. (hereinafter referred to as "Datang Hongkong") flat Asian shares mortgage Book signed in July 9, 2004 with China, all stake in Datang Hongkong Datang holdings in September 26, 2005 transferred to the Hua Ping Asia, transfer procedures have been completed, China Datang Group held flat all equity holdings.

At the same time, the four directors of Datang Holdings Wei Shaojun, Mr. Li Dawei, Mr. and Mr. Zhao Guan's resignation came into effect on September 26, 2005. Under the agreement, Sun Qiang, managing director of Warburg group, becoming the only director of Datang holdings.

According to Warburg shares, Datang Group, Datang holdings, Hongkong Datang and Datang microelectronics in April 1, 2004 signed the "investor agreement" schedule third (B) (I) shall be two DMT seven directors nominated and elected Datang holdings. In view of all equity Warburg group has holdings of Datang holdings, Warburg group prepared by Datang holdings, according to investor agreement (C) of schedule third shall be removed from the current by two directors holding elections Datang Datang microelectronics, Wei Shaojun and Li Dawei, and the election of sun Qiang and Cheng Zhanglun as the new director of Datang microelectronics.

Cheng Zhanglun and sun Qiang, director of China Ping group.

According to Datang shares, Xi'an Datang Telecom Co. Ltd., the Ministry of Public Security Research Institute, Wp China Investment I Limited and Datang holdings in April 1, 2004 signed the "on the establishment of a Sino foreign joint venture Datang Microelectronics Technology Co., Ltd. joint venture contract article 10.1 (b) of the rules, the chairman of Datang Datang Microelectronics by holding the appointment. Warburg group will be appointed by Datang holding Sun Qiang as chairman of Datang microelectronics.

In a public statement in December 6th, Warburg group described the reasons leading to these results.

Warburg Group believes that the issue of Datang Telecom fails second times to flat group of convertible bonds, while Datang Telecom violated the Warburg group interests of association exchange Datang microelectronics 160 million yuan.

After July 9, 2004, Datang Telecom in the board of directors and the general meeting of shareholders and the approval of relevant government departments, signed a series of agreements on investment of Datang microelectronics and Warburg group, including a corporate restructuring, the protection of small shareholders, related transactions in terms of compensation for breach of contract and measures and the relevant shares mortgage book.

Warburg Group believes that in accordance with the investment agreement after the injection of $30 million, they found Datang Telecom Datang electronics operation has serious and unreasonable interference. "Datang Telecom not only in accordance with the investment agreement to complete the reorganization and to issue flat series B convertible bonds, and the transaction through transfer and occupation of Datang microelectronics 160 million yuan of funds, violation of the Warburg investment group of small shareholders."

As of press time, Warburg group said it was still in direct communication with Datang Telecom, hoping to find a solution to the problem with Datang shares.

Complex equity arrangement

June 8, 2004, the Great Hall of the people in Beijing. Wei Shaojun Warburg group global managing director of W.Bowman Cutter and President of Datang Telecom to open a "total exhibitionambitious" scroll smile to the media, then the two is not expected, the "total exhibitionambitious" will encounter crisis after a year.

The source of the crisis is a series of complex equity arrangements.

Warburg group, founded in 1938 in New York, is one of the world's oldest and largest venture capital companies. The group's management of the fund totaling $15 billion, with nine branches in the world to invest around more than and 150 companies.