Gongfu movie star Jet Li is game for shell company

Jet Li, actor and founder of One Foundation, speaks at the Forbes Global CEO Conference in Singapore.
Jet Li, actor and founder of One Foundation, speaks at the Forbes Global CEO Conference in Singapore.PHOTO: BLOOMBERG NEWS

HONG KONG (Reuters) - A group led by Chinese movie star Jet Li and his wife Nina Li invested US$187 million (S$252.5 million) in a Hong Kong-listed firm, as appetite surged for so-called "shell" companies listed in the city.

The duo made the bulk of the investment, agreeing to buy 11.5 billion new shares of Far East Holdings International at HK$0.10 each, or about HK$1.15 billion, via a holding company, according to filings with the Hong Kong stock exchange this week.

That is equivalent to a 97 per cent discount to Far East's closing price on June 26, before the stock was halted pending an announcement.

Private companies and individuals are rushing to cash in on a steady flow of Chinese funds that have fuelled a rally Hong Kong stocks, by snapping up so-called listed 'shells'.

Typically, such shell companies get a large injection of cash and assets that often change their business.

Demand for shell companies, entities which usually have few material operating assets, has soared in recent months. Such deals are generally considered a quicker and easier way for investors to gain a listing and access to funds than going through an initial public offering.

Mr Li, better known for his acrobatic martial arts films, and his wife bought the stake on July 10 through Regent Pacific Business, the filings showed.

Fast East describes itself as an investment holdings company active in the technology, media, manufacturing and financial services sectors, according to its website.

The Far East deal follows a similar transaction last month by China's largest China's No 1 social network and online media company Tencent Holdings and developer Evergrande Real Estate Group to buy a loss-making solar panel maker.