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Christine Chan

A SHENZHEN legal-person company, backed by Sichuan's Chengdu University of Electronics Science, has taken a 5.2 per cent stake in Shanghai Feile Acoustics Co.

  Shenzhen Tianji Optical Electronics Technology (Tianji), set up in March as a legal-person company, said it intended to buy further into the Shanghai counter.

   In reply, the Shanghai firm said it was too early to take action on the purchase by Tianji, whose ultimate aim was not known.

  Shares of legal-person companies, which are placed with legal persons, can only be traded on the computer trading networks of STAQ and NET in Beijing.

  This compares with a shareholding firm, which can issue shares to the state, legal persons, individuals and foreigners, and list on the two stock exchanges.

  In a Shanghai stock exchange announcement yesterday, Tianji said the firm and its associate Shanghai Shengzhai held 522,864 A shares or 5.2 per cent of the Shanghai counter.

  Shanghai Feile Acoustics, dubbed ''Small Feile'' - as opposed to Shanghai Feile Co, or ''Big Feile'' - has an issued A-share capital of 10 million shares. It has no B shares.

  In Shanghai yesterday, Feile general manager Cao Yiqun said: ''No action has been taken as we don't know whether the buying is for equity investment or management participation.

  ''But so long as the purchases will do well for the shareholders, they should be considered normal.''   Tianji deputy general manager Wu Weigong said yesterday in Shenzhen it picked Feile because the firm could help it develop consumer audio and acoustic products.

  Listed in December 1990, Feile manufactures audio equipment, acoustic instruments and theatre acoustic equipment.

  ''The investment is also a new avenue for us in our future development in the securities sector,'' Mr Wu said.

   The amount paid for the stake in Feile was not revealed.

  But he said: ''It's possible for us to buy more into the company.''    Tianji, officially set up in March with a paid-up capital of 398 million yuan (about HK$533 million at the official rate), has been using research at Chengdu University of Electronics Science to develop optical recordings.

   Major research products include magneto-optical disks, magnetic recorders, and drivers for such recorders, most of which have obtained franchises in China.

  The company has so far produced some 50 hi-tech optical recording systems for use mainly by the country's broadcast stations, according to Mr Wu, who is also the university's assistant headmaster.

  It is understood the company has Beijing's blessing, as can be seen from the background of its general manager.

  ''Our general manager Li Jun was formerly vice-director of the research institute of the State Commission for Restructuring the Economy,'' Mr Wu said.

  Shenzhen Tianji had more than 186 shareholders, all legal persons, he said.

   Chengdu University of Electronics Science had more than a 10 per cent holding, he said.

   Other shareholders include subsidiaries of the Shenzhen conglomerate Bao An Group, Guangdong air-conditioner maker Huabao and Shenzhen government-backed Number Two Construction Co.

  The market had expected a possible foray into Feile, and yesterday's announcement did little to the share price.

  It closed at 37.91 yuan, up 31 fen or 0.82 per cent from Tuesday, although it hit a high of 46 yuan during the day.

  Rumours had surrounded the stock since Shenzhen Bao An bought into Shanghai Yanzhong Industrial and Shenzhen Vanke into Shanghai Shenhua Industrial.

  That buying pushed up the share prices of smaller counters for several weeks.

      Last year, Feile posted a net profit of 2.73 million yuan by domestic accounting principles.



Shenzhen company buys 5pc of Shanghai Feile Acoustics