Huobi, the Chinese cryptocurrency exchange, has managed to attain a majority stock of a Hong Kong-based company by the name of Pantronics Holdings Ltd. via a backdoor listing deal. The news was first reported by JRJ.com on the 27th of August.
Backdoor listings, also usually termed as a reverse takeover or as a reverse Initial Public Offering (IPO), can allow a privately held company such as Huobi to purchase a publicly traded one such as Pantronics and in the process avoid the usual process associated with IPOs. In doing so the buyer, in this case, Huobi can skirt around the regulatory issues and due diligence that entails the process of a public offering and allows the buyer automatic inclusion on the stock exchange.
According to the JRJ report, Huobi has managed to attain 73.73% of Pantronics Holdings Ltd. which in turns makes Huobi the one in charge of the electrical and electronic product manufacturer. On the 22nd of August, Pantronics halted the trading of its shares on the Main Board of the Stock Exchange and Hong Kong Limited and stated the reason for the same to be “pending the release of an announcement relating to a possible offer to be made under Rule 26 of the Hong Kong Codes on Takeovers and Mergers, which is inside information in nature.”
Upon being questioned whether Huobi would be likely to involve itself in a backdoor listing the CEO of Huobi, Li Lin stated that such talks were mere rumours and that he believed “traditional financial market will embrace the blockchain economy in the future.”
According to Coinmarketcap, the Huobi Token is at the moment trading for about $2.32 USD and has risen over 8% in the past 24 hours, with many attributing the rise in the token price to Huobi attaining control of Pantronics. Financial Times shows the market cap of Pantronics Holdings Ltd. to be at 926.45m HKD ($118 million).