In a regular press conference held by Ministry of Commerce (MOFCOM) on June 17th, spokesperson Shen Danyang said that MOFCOM has established the case on June 4th of the acquisition of a 100% stake in Hangzhou Hundsun Technologies Group Co. Ltd. (Hundsun Group) by Zhejiang Rongxin Network Technology Co. Ltd., a company that is 99.1% controlled by Ma. The acquisition is currently being reviewed by MOFCOM in compliance with the Anti-Monopoly Law of China, as the proposed transaction has potentially triggered the “Concentration of Business Operators” clause.

Hundsun Group controls 20.62% of Shanghai-listed Hundsun Technology Inc. Ltd., one of the country’s biggest trading software provider for securities and funds management companies. According to a filing with the Shanghai Stock Exchange made by Hundsun Technology Inc, the total proposed consideration is RMB 3.29 billion. Upon the completion of the deal, Jack Ma, through Zhejiang Rongxin, will become the actual controller of Hundsun, leaving the founder and executive team of Hundson collectively holding a 10% stake of Hundsun Technology Inc. Ltd.,

Monopoly or not?
According to the Investment Director of Zhejiang RongXin, Huang Chen, Zhejiang Rongxin initiated verbal contact with MOFCOM upon the execution of the agreement on April 1st, and subsequently filed with MOFCOM for antitrust review. The threshold for a Business Concentration Review is 2 billion RMB turnover in China within one accounting year. Hundsun’s turnover for last year was RMB 1.2 billion, according to its annual report, while Zhejiang Rongxin made only RMB 20 million in turnover. “Despite of Rongxin’s annual turnover being small, the combined turnover, taking into account of all its affiliated entities and its controlling subsidiaries, still surpasses the trigger amount.” Huang Chen said.

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Scully Wan

Beijing based tech contributor. Follows social media, e-commerce, digital currency, healthcare and life science, economy, fashion and design, and everything that involves inter-cultural phenomena. You...