GORDON Wu Ying-sheung, chairman of Consolidated Electric Power Asia (CEPA), has defended his buying of warrants issued by Peregrine Derivatives in his company shortly before announcing nearly US$20 billion of contracts.
'I think CEPA is a great company. If someone is to offer me 50 million warrants on the same terms as Peregrine, I would take them,' he said yesterday.
A spokesman for the Securities and Futures Commission confirmed that the authority had looked at the transactions and had no grounds for any action.
Mr Wu declared the buying of 50 million CEPA warrants, with an effective date of September 26, on stock exchange data sheets issued on Monday.
He said he entered into a verbal agreement with Francis Leung Pak-to, managing director of Peregrine Investments Holdings, to buy warrants issued on five million CEPA shares on September 17 following a power deal signed in Indonesia, even though terms of the warrant issue had not been decided.
As each warrant only corresponds to a tenth of an ordinary share, this translates into 50 million warrants.
September 17 was a Saturday, and CEPA had closed at $17.25 the previous afternoon. Following this agreement, CEPA announced two of its largest ever deals, the first being a memorandum of understanding (MOU) with the Indian Government, which could cover work worth US$12 billion.