Carlyle group’s awareness of China investment risks
The Carlyle Group was reportedly having problematic issues with two of its portfolio companies, China Forestry, a Hong Kong-listed plantation operator and NASDAQ-listed China Agritech.
According to Financial Times, these two companies have been accused of investment fraud that causing companies to be under suspended from trading.
China Forestry chief executive, Li Han Chun, was arrested in February for allegedly embezzling $4.6 million. According to the Hong Kong Stock Exchange, the Carlyle Group holds a 11% stake on China Forestry in which. It originally invested $40 million for 12.5% of the company in and subsequently took another 4% for around $15 million. Partner Group has also invested $30 million for a 7% stake in China Forestry.
Meanwhile, China Agritech, which the private equity group holds 22% stake in, is being investigated over possible malicious stock manipulations. It has received notice from NASDAQ that the bourse intends to delist the Company's common stock based on public interest concerns and the Company's failure to file its 2010 Form 10-K on time.
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