DIRECTORS of red-chip companies could be sitting on huge paper profits from share options granted before the China-affiliated companies became popular, recently released annual reports show.
The dramatic rise in the share price of the locally-listed units of mainland ministries and regional governments in the run up to the handover has potentially made paper millionaires of many mainland businessmen working in the SAR. However, few directors had taken up these lucrative performance incentives as of December 31.
Shanghai Industrial Investment has granted 17 million share options to directors, at an exercise price of $8.808. The company's 1996 annual report did not state how many options had been exercised or were outstanding.
Chairman Cai Laixing tops the list with four million options, while a further nine directors have the option of buying between one million and three million shares.
Shanghai Industrial, an arm of the municipal government of the mainland's richest city, has been aggressively sought by investors, who have boosted its share price since the company floated last year.
Assuming Mr Cai had exercised all his options, he would have made a staggering paper profit of about $152 million, based on Friday's closing price of $46.90.