Funds to be used to establish a national database for product identification Citic 21CN, the Citic Group's information technology and telecommunications services provider, is aiming to raise US$70 million through a five-year convertible bond for the establishment of a centralised nationwide database for product identification. The bond consists of two tranches - US$55 million and US$15 million. The latter is subject to the approval of an extraordinary general meeting at a time to be announced. The convertible bond programme, if exercised when it matures in December 2010, would allow the company to issue 399.1 million new shares, representing about 10.8 per cent of the enlarged share capital. The database provides a platform for manufacturers to label their goods and for consumers to authenticate the goods they intend to buy, the company said. A joint venture set up in January with the Information Centre of General Administration of Quality Supervision, Inspection and Quarantine and China Telecom, levies an annual fee of 100 yuan to 1 million yuan on manufacturers, Citic 21CN executive vice-chairman Amy Chen said. The product identification service 'Piats' was launched within the province of Hebei and is scheduled for a further rollout early next year, she said, adding that 1,730 manufacturers in Hebei have hooked up with the database and about 20,000 terminals have been installed in the province. Citic 21CN will see positive operating income from the joint venture, in which it has a 50 per cent stake, in the first half of next year, according to Ms Chen. Shares in the company were suspended yesterday; they have fallen 49 per cent over the year. Counterfeiting is still rampant throughout mainland China. Foreign and local manufacturers are losing revenue and the quality of everyday items, such as baby food, medicines, cosmetics and vehicles parts, is deteriorating to the point that it threatens public health and safety. Consumers can check whether their goods are fake through the platform via their mobile phones, fixed-lines, online and on private terminals installed by the company at shopping malls and supermarkets.
