Chinese VoIP Company Acquired

This is an interesting development. It’s not impossible for non-Chinese businesses to own companies in China, but no more than 2 years ago, someone with an English/ TESOL tutoring business there told me it isn’t the easiest thing. You have to have a Chinese partner. You also can’t own property outright, though you can lease for 99 years. Or something to that effect. Now assuming that my source wasn’t mistaken, it’s surprising that a US company acquired 100% ownership of Jinan Yinguan Technology Co. Ltd., a telecom company in Shandong province, in return for 40Mln restricted shares of the buyer. Stranger still is that the acquiring company is Crawford Lake Mining - presumably a mining company, not a telecom.

Crawford’s motivation for purchasing Jinan was for their NP Soft Switch System. They’ll be changing their name to China VoIP & Digital Telecom Inc. Sounds like someone bought a reverse shell company.



2 Comments

  1. Don Manies Says:
    January 24th, 2007 at 12:05 am

    I’m not sure what a reverse shell company is, but after reading a large portion of the documentation filed with the SEC on this “merger” CVDT is calling it a reverse merger and all of the top indivuals from the mining company have been removed and replaced by the officers of CVDT. The new officers seem to have pretty reputable backgrounds. Read it and let me know what you think.

  2. voipr Says:
    January 24th, 2007 at 4:18 am

    A reverse shell company (I think that’s the terminology, though my memory fails) is esentially a company that is already listed on some stock exchange and is purchased by a non-public company to ease the “going public” process. It’s completely legal, and in many cases, the shell is an old mining company that didn’t do so well but has no capital for further projects.

    You can sometimes buy shells for $1,000, and they are purchased to do reverse mergers, as you mentioned. Usually, all the staff in the shell are replaced, unless they are relevant/ useful - essentially what you have mentioned about
    CVDT.


Leave a Comment