Why Haidilao’s US$14.9 million credit line to founder is fuelling China tax speculation
Haidilao International Holding has agreed to provide its founder, Zhang Yong, with a one-month loan of up to the Hong Kong dollar equivalent of 100 million yuan (US$14.9 million), a move that has raised market speculation as investors closely watch Beijing’s October 22 deadline for offshore trust taxation. The Hong Kong-listed hotpot chain said in a stock exchange filing on Monday night that it…
Haidilao International Holding has granted its founder, Zhang Yong, a one-month loan of up to HK$117.2 million (US$14.9 million) with interest at 0.6 percentage points above the Hong Kong interbank offered rate. This move has sparked market speculation as investors anticipate Beijing's October 22 deadline for offshore trust taxation.
The loan, which Zhang can only use for personal financial arrangements, will not impact daily operations or business development, according to the company's filing. The interest income will benefit Haidilao and its shareholders. Haidilao, a hotpot chain listed on the Hong Kong stock exchange, reported that mainland China accounts for about 96% of its revenue. The company has not disclosed the purpose of the loan or any tax-related considerations.
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