No Word
Nelson Chen, Liu’s most senior Sydney-based executive and a director of Marenica, General Moly and Hong Kong units of Hanlong, had left for Beijing to seek clarification on Liu’s status, Chris Yang, an executive also in Sydney, said two days ago. Efforts to reach Hanlong officials in China were unsuccessful. A spokeswoman at Sundance who declined to give her name citing company policy said yesterday that the company had no new information on Liu.
At the time of Hanlong’s 2009 international debut, public opposition to resources acquisitions by Chinese state-owned companies was mounting. Australia blocked China Nonferrous Metal Mining Group’s bid for Lynas Corp., a miner of rare-earth minerals over which China has a global stranglehold. Yanzhou Coal Mining Co. won approval for its $3 billion takeover of Felix Resources Ltd. only on condition it remained an Australian-operated company with locally based top executives.
Hanlong, as well as its targets, were keen to play up the group’s independence from state control.
Private Policy
“As a privately held Chinese company we can offer enormous value to Moly shareholders as well as the Australian people,” Hanlong’s Sydney-based Managing Director Steven Hui Xiao said in a statement announcing the 2009 acquisition. Moly Managing Director Derek Fisher described Hanlong as “a highly respected substantial private Chinese group.”
Only, as Liu’s case underscores, all major Chinese overseas acquisitions need the approval of government regulators, including the National Development and Reform Commission -- the agency that oversees China’s strategic economic objectives. In Liu’s case, the deals also depended on funding from lenders including China Development Bank, whose mission is to make loans that further government policy.
Beijing-based CDB, the largest policy bank in the world, didn’t respond to a fax and e-mail seeking clarification of its lending commitments to Hanlong.
Government Ties
Entrepreneurs who flourished during communist China’s experiment with market-oriented reforms needed access to state assets, bank loans, licenses, land grants and other advantages within the purview of government officials.