July 30th, 2012 | Global Times CNOOC -Nexen deal faces inside trading allegation
The US Securities and Exchange Commission (SEC) filed a complaint Friday accusing Zhang Zhirong, chairman of China Rongsheng Heavy Industries Group Holdings, and other Singapore traders of gaining $13 million from insider trading ahead of a bid by China National Offshore Oil Corp (CNOOC) for Canadian oil company Nexen Inc, Xinhua reported Sunday.
The SEC said the federal court in Manhattan had frozen assets worth over $38 million belonging to Hong Kong-based Well Advantage, controlled by Zhang, and other unnamed traders who used accounts in Hong Kong and Singapore to trade in Nexen stock.
They made trading profits of $7 million and $6 million respectively by using inside knowledge of the merger to buy Nexen shares before the announcement, the SEC said. CNOOC announced July 23 its acquisition of Nexen for $15.1 billion, China’s biggest overseas takeover. Nexen shares jumped 52 percent on the news.
Well Advantage bought 0.83 million Nexen shares on July 19, profiting $7 million by the closing price on July 23. However, it had not bought any shares between January and July 19 this year.