Opinion | Investors in Poly Culture IPO should take note of its firepower
Mainland's top auction house goes to market but bidders for the stock should consider its weapon dealer directors, business and trusts
China's art market has soared to become the world's second-largest after the United States and most of the top 10 deals last year involved Chinese artists. Now its top auction house is doing a public share offering.
But before jumping on to the Poly Culture bandwagon, there are certain things with "Chinese socialist characteristics" that investors should be aware of.
First, the management. Poly Culture is owned by Poly Group, which originated from the People's Liberation Army. Yet, the dominance of weapon dealers on the board of such a culture business is still extraordinary.
In line with its princeling and army roots, the firm is headed by former Poly Group chairman Chen Hongsheng, the son of Jiangxi's first party secretary, according to its draft prospectus.
The track records of all three Poly Group-related companies … are not promising
Among its six non-independent directors are Wang Lin, the chairman of an artillery shell and grenade producer; Zhang Zhengao, the Poly Group's general manager who delivered four navy vessels to Ghana in 2012; and Zhao Zigao, who was recently reprimanded as the head of an explosives manufacturer which was involved in an accident that killed 33 people.