Regular WiC readers may be familiar with the National Equities Exchange and Quotations. Known as the New Third Board, the over-the-counter bourse has a reputation as the equity market with least regulatory intervention in China. That means some promising start-ups have floated on the Beijing-based market. But high returns often mean high risks – and investors may soon see the first NEEQ firm go under.
The company in question is CG Mobile, a provider of mobile communication solutions. It went public in 2014 but rumours began to emerge earlier this year about severe financial troubles. Last month it finally put out a stock exchange announcement saying that it was not bankrupt – but it also told investors that virtually its entire board of directors had resigned. CG Mobile then appointed Wang Xilai, a 67 year-old, as its chairwoman, chief executive and secretary to its board. Yet Wang doesn’t look the best-placed candidate to rescue the troubled firm. According to the company’s own information, she worked in a textile factory for nearly 30 years and has been retired since 1999.
So what’s next? Few know the answer. Guotai Junan, the sponsor of CG Mobile’s listing, said the company has ceased all business operations since January. The broker is unsure that the new board – under the leadership of Wang – can perform its duties.
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