How China turned wine into vinegar for Remy

Dynasty Fine Wines

29/07/2019 08:56

(The author is a Reuters Breakingviews columnist.  The opinions
expressed are his own.)
    By John Foley
    HONG KONG, July 29 (Reuters Breakingviews) - Remy Cointreau
spotted China’s wine potential too soon. Its 1980 joint venture
proved a ground-breaking disaster. The venture’s shares, halted
for six years amid fraud allegations, have resumed trade at half
the closing price. Sometimes it’s worst to be first.
    Full view will be published shortly.
    On Twitter https://twitter.com/johnsfoley
    
    CONTEXT NEWS
    - Dynasty Fine Wines resumed trading in Hong Kong on July
29, more than six years after the Chinese vintner's stock was
suspended. The stock was down almost 50% at HK$0.75 in afternoon
trading.
    - The company was formed in 1980 through a joint venture
between a state-owned vineyard and what is now French liquor
maker Remy Cointreau. It listed in Hong Kong in 2005.
    - Dynasty said in 2013 that its auditors had received
"anonymous allegations" regarding various aspects of its sales
and inventory management.
    - It said on July 26 that an investigation by accounting
firm EY had produced no evidence of illegal behavior, but
acknowledged problems with the availability of historical
records, which it attributed to "chaotic business management".
    - Remy Cointreau valued its 27% stake at 13.9 million euros,
or HK$0.36 per share, in its annual report for the year ended
March 31. Its annual report noted "the difficulty of
non-executive directors in influencing the return to normal of
the situation".
    - For previous columns by the author, Reuters customers can
click on  FOLEY/ 
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Dynasty statement    https://www1.hkexnews.hk/listedco/listconews/sehk/2019/0726/ltn20190726842.pdf
Remy Cointreau annual report    https://www.remy-cointreau.com/app/uploads/2019/07/Registration-Document-2018-19.pdf
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 (Editing by Pete Sweeney, Katrina Hamlin and Sharon Lam)
 ((john.foley@thomsonreuters.com; Reuters Messaging:
john.foley.thomsonreuters.com@reuters.net))