ASX issues queries to 50 companies over Chinese money concerns
Link copied to
The ASX has queried around 50 Aussie-listed companies with interests in China over potential difficulties in repatriating money back home.
Listed companies with interests in China were asked if they experienced difficulties repatriating money or converting money into foreign currencies.
The ASX also asked whether companies were aware of any changes to Chinese laws prohibiting repatriation of money or conversion into foreign currencies.
Repatriation is the process of converting a foreign currency into local dollars — in this case converting Chinese Yuan to Australian dollars. The dollar amount resulting from the repatriation of funds depends on the exchange rate at the time of the conversion.
There have previously been concerns raised over whether Chinese regulators were making it harder to allow capital to be repatriated to other countries including Australia.
A spokesperson told Stockhead the ASX was testing an issue relating to an upcoming ASX listing of a Chinese financial services company, whose name has been withheld, which was experiencing difficulties in repatriating money from China.
“We wanted to find out whether the issues of repatriating of money from China was specific to the company or was more widespread,” he said.
Half of the companies queried had so far responded. None had raised any issues.
Over the past few years, a plethora of Chinese companies across various sectors have called the ASX home to avoid the cost and free float requirements of larger Asian exchanges.
However, the vast majority of these stocks have been failing to perform.
One such company is Asaplus Resources which received a query from the ASX. The cash strapped explorer, which holds interests in the Beikeng iron ore mine in China, recently was suspended from trading for not paying its annual listing fees.
The company also received an Appendix 5B query last month after flagging $200,000 would be spent in the September quarter despite only have cash in the kitty of $206,626 at the end of July.
Another ASX-listed exploration play to receive ASX query relating to repatriation of money is China Magnesium Corporation.
The news comes after the ASX took the unusual step in July when it placed several Tanzanian explorers into trading halts after the country’s government announced drastic changes to the country’s Mining Act.