Big Chinese share-sale plan mired in confusion

China United Network Communications Ltd, the Shanghai-listed arm of China Unicom, was to receive the infusion under a deal announced Wednesday, part of the Chinese government’s push to overhaul inefficient state-owned enterprises (SOEs) by luring in private capital.

The investors were to include internet titans like Tencent, Alibaba, and JD.com, taxi-hailing service Didi Chuxing and several other firms.

However, confusion subsequently emerged over exactly which companies would be involved, with China United Network Communications withdrawing a statement to the Shanghai Stock Exchange about the agreement just hours after submitting it on Wednesday.

Meanwhile, plans to lift suspensions on China Unicom-related shares, were subsequently reversed.

China United Network Communications said Thursday in Shanghai that its shares, suspended since April, would remain so for several more days pending further announcements.

“There’s been confusion right to the very last moment — they shouldn’t be rushing ahead to make the announcements,” Francis Lun, Hong Kong-based chief executive officer of Geo Securities Ltd, told Bloomberg News.

“It shows their incompetency. The approval process has to be called into question when they deliver misleading messages like this.”

The fiasco may raise questions over China’s plans to reform SOEs while waging a parallel campaign to crack down on runaway credit in the private sector.

China’s ballooning debt prompted a warning Tuesday by the International Monetary Fund that the country was on a “dangerous trajectory”.

Unicom Group was among six SOEs chosen by Beijing last year for a pilot programme to funnel private capital into state firms, which has seen Unicom-related shares soar this year.

Unicom’s net debt has risen by 20 percent in the last five years to 150 billion yuan ($22 billion), according to Bloomberg, as it spent on mobile network upgrades and plans an expensive 5G rollout expected to benefit the Chinese tech giants.