Huobi is one amongst the leading cryptocurrency exchange which will now control the share in the investment firm through Backdoor Listing.
Backdoor listings are also familiar as the reverse takeover or reverse Initial Public Offering (IPO). This enables a private holding firm to purchase a public trading firm evading the regulatory issues, public offering process, and due diligence. After accomplishing the deal, respective buyer achieves the automatic inclusion on a stock exchange.
Huobi reportedly acquires 73.73 percent of Pantronics Holdings Ltd. This makes cryptocurrency exchange, the actual controller of the power-based electronic products manufacturer.
On 22nd August this year, Pantronics ceased its share trading on the Hong Kong Stock Exchange Main Board (HKEx). This was because of the offered possibility made of the Hong Kong Codes under Rule 26 on the Takeovers and Mergers.
While asking about the exchange intention to perform a backdoor listing; the CEO at Huobi, Li Lin says,
It’s just a rumor. Currently, the exchange business is not entirely compliant on the global scale, so a backdoor listing might be complex to operate. He also adds believing that the traditional financial market in future will embrace blockchain economy.
Back in July 30, Caixin media report says that HKEx was conducting a rule revision to take stern measures regarding backdoor listings. They are trying to clean up the market and enhance the listing firms’ quality.
However, the measures proposals are not aiming to block the backdoor listings. They intention sounds to ensure that firms do not skirt rules and erode the investor confidence.
The chief regulatory officer who is also the head of listing at HKEx, David Graham comments:
We essentially allow a backdoor listing. But what [we want] to ensure is that when this happens, the quality of the assets and the ultimate combined company to be listed on our exchange have been through an appropriate due diligence and vetting process.
According to the Coinmarketcap, currently, the Huobi Token is trading at $2.29. They have achieved almost 8 percent within the 24 hour period. While there is some media attribute that surges the price of the token to the recent acquisition. At the moment, the market capitalization value of Pantronics Holdings Ltd. is around HKD 926 million ($118 million).