Nov. 20, 2006 (China Knowledge) – Founder Group, the parent company of Zhejiang Securities Co. Ltd., may buy a stake of not more than 70% in Sun Securities Co. Ltd., according to the China CBN website citing a source close to the deal.

The source also said that Zhejiang Securities will not interfere in Sun Securities’ brokerage business after the acquisition.

Earlier reports had said that Founder Group would acquire no less than an 80% stake in Sun Securities, but have to settle for 70% instead. This is because the shareholders of Sun Securities have persuaded the local government to allow them to hold at least 30% of the company. Otherwise, they will have no right to decide on some important issues if they hold less than 30%.

The report also said that Zhejiang Securities’ headquarters will move to Changsha where Sun Securities’ headquarters is located. In addition, Sun Securities will reportedly raise funds via a share placement, then attempt an overseas or A-share listing before finally going into a joint venture with Zhejiang Securities.

The result of the acquisition will be known this week.