China's Ping An Insurance denies tax evasion rumor
3/7/2008 17:18
Ping An Insurance (Group) Co, China's second largest life insurer, today
denied market talk of a government investigation into tax evasion.
The denial
came after the rumor prompted panic selling of Ping An shares and drove the
price down by the daily maximum of 10 percent yesterday.
In a statement to
the Shanghai Stock Exchange today, the insurer said the taxation authorities
were checking its tax records from 2004 to 2006.
It added: "The check-up is
routine and unfinished, and the market talk is not the truth."
The stock
plunge also came on speculation that Ping An would be required to write off huge
paper losses from investment into the Belgium-Dutch financial institution
Fortis, analysts said.
Ping An Insurance bought a 4.18 percent stake in
Fortis for 1.81 billion euros in November. Fortis shares had fallen more than 45
percent since then.
The Chinese insurer also was planning to pay 75 million
euros (US$119.09 billion) to increase its stake in Fortis, in a bid to maintain
its status as the biggest single shareholder.
Fortis planned to shore up its
balance sheet by raising 8 billion euros, including issuing 150 million new
shares at a price of 10 euros each.
Ping An shares plunged as much as 9.94
percent before closing 4.79 percent lower this morning.
Xinhua
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