(Yicai Global) May 10 -- Chinese menswear retailer Heilan Home Co. [SHA:600398], better known as HLA, has become the largest shareholder of Shanghai Handpay Information & Technology Co. following the acquisition of a majority stake in the electronic payment firm.
HLA bought 64.1 percent stake in Handpay, the industry news site Paynews reported, adding that the other shareholders stakes, therefore, fell below 10 percent.
HLA's process of acquisition of the company started late last year when former shareholder Tibet Yunbai Investment Management Co. sold a 6.9 percent stake in Handpay for nearly CNY56 million (USD8.8 million) in December.
Under a similar price, the acquisition of the roughly 64 percent stake would amount to more than CNY500 million. Its parent company, Heilan Group Co., has invested in over 30 external businesses including Bank of Jiangsu Co., Jiangyin Rural Commercial Bank Co. and Baofeng Technology Co.
Unlike VIPShop Holding Ltd.'s VIP.com and JD.Com Inc's e-commerce trading platform JD.com, which rely on third-party sellers, HLA has its own e-commerce site mostly featuring its own products, so compliance with e-payment regulations is not a top priority, unless the company plans to diversify into other product lines and accept external sellers in future, analysts say, adding, therefore, the deal can be considered a financial investment.
The Shanghai branch of the People's Bank of China imposed a fine of almost CNY570,000 on Handpay last August for violations of payment service regulations. The firm has been licensed for operating internet-based and mobile payment businesses.
Editor: Mevlut Katik