Foreign-Backed Online Trading JV Obtains Chinese Gov't Licenses
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[BEIJING] The joint venture between Los Angeles-based Hartcourt Companies, Inc. and UAC Online Stock Trading Inc. of China has been approved by the government, Harcourt announced on Friday.
The Chinese Government has issued the JV an Official Business License and a Certificate of Foreign Investment despite the repeated official declarations that foreign investment in domestic Internet companies was technically illegal under Chinese law.
Harcourt claims that UAC is the first operating agent designated by China Telecom to bring Chinese brokerages online.
UAC's system has been in operation at two offices of China Securities in Beijing and 12 additional offices should be wired up during the next few weeks.
At present, there are 4,000 brokerage offices in China serving 40 million investors. UAC's mission is to quickly capture as much market share as possible.
Total revenues, excluding the TV set-top box users segment, are projected to exceed $40 million by 2004.
Alan Phan, chairman and chief executive officer of Hartcourt, stated, "We were surprised to receive the licenses this early. Our Chinese partners have delivered more than expected."
"With its technology and infrastructure, UAC has positioned itself to become the first and major E-trade in China," said Phan.
UAC is also working with Financial Telecoms Ltd (FTL) of Hong Kong to create a Chinese language financial portal for the Internet users of China and Hong Kong.
According to Harcourt, the merged entity, with the participation of additional well-known American and Chinese strategic partners, will proceed with an IPO planned for the 2nd quarter of 2000. Officials did not indicate where shares of the company will be listed.