Attempts by Giordano International to revive its troubled China operations were scuppered last night when five state-owned enterprises backed away from a proposed share placement in mysterious circumstances.
The placement was designed to exorcise the ghost of the clothing retailer's mainland troubles, which arose after the company's former owner Jimmy Lai Chee-ying offended Chinese Premier Li Peng.
The placement would have allowed Giordano to build up a network of joint-venture outlets in China and may have paved the way for the reopening of 11 of its stores in Shanghai that remain shut.
'The directors confirm . . . there is no present intention to undergo any equity fund raising exercise in the immediate future,' the company said.
The news is likely to expose Giordano to severe selling pressure today.
Giordano shares recovered strongly when the proposed placement was announced as investors thought the company had finally patched relations with China.