US sanctions prompt Nasdaq to delist Pingtan Marine
The Nasdaq Stock Exchange formally moved to delist Pingtan Marine Enterprise on 21 December, 2022.
The Fuzhou, Fujian, China-based distant-water fishing firm was hit with sanctions issued by the U.S. Treasury Department’s Office of Foreign Assets Control (OFAC) on 9 December, 2022, and Nasdaq temporarily froze trading in the company’s stock the same day, but allowed it to resume trading on 19 December.
In a press release, Pingtan acknowledged Nasdaq’s Listing Qualifications Department “has determined that the continued listing of the company's securities are no longer warranted pursuant to Listing Rule 5101.” The rule allows the market to deny listing to a company employing an individual in a director role with a history of regulatory misconduct; Pingtan Marine Founder, Chairman, and CEO Xinrong Zhuo was included in the U.S. sanctions.
The delisting was scheduled to take place 30 December, but in its 27 December release, Pingtan announced its intention to appeal the move, which allows the company’s shares to remain listed pending a final decision from Nasdaq’s hearing panel.
“There can be no assurance that the hearing panel will grant the company's request for continued listing,” the company said.
Regardless of Nasdaq’s actions, trading in Pingtan Marine’s stock will be halted at the end of trading on 8 March, 2023, in accordance with an order from the U.S. Treasury Department related to its sanctions, according to the company.
“The company also intends to take appropriate measures to protect the interests of the company and its shareholders, and is currently reviewing its options with regard to the said OFAC action,” it said.
In a separate press release issued 22 December, Pingtan Marine announced the reappointment of Zhuo and Yonglu Tang to three-year terms as the company’s directors and the approval of a planned share capital increase from USD 130,000 (EUR 123,000) to USD 1 million (EUR 943,000), with Zhuo purchasing all newly issued shares. Amendments to the company’s articles of association were also approved, including the awarding of 25 votes at general meetings to each preferred share in the company, which can only be owned by Zhuo or his family and affiliates.
“This dual-class share structure provides Mr. Zhuo with the ability to control the outcome of matters requiring shareholder approval, which also provides the company with more flexibility to employ various financing and transaction strategies involving the issuance of equity-linked securities, without the concerns over excessive dilution in Mr. Zhuo’s voting power, which may otherwise result in change of control or the loss of a key man’s leadership,” the revised articles of association now read.
Pingtan Marine has received millions of dollars’ worth of subsidies from the Chinese government in recent years, including funding for a new seafood-processing center being built in the company’s home province of Fujian.
Photo courtesy of Pingtan Marine