Chinese state funds invests in China’s BGI Genomics Co, capitalizes on COVID-19 pandemic

In a development that marks China capitalizing on the coronavirus-driven COVID-19 pandemic, the Chinese government has made an investment in BGI Genomics Co, a Chinese listed company that supplies millions of COVID-19 tests globally.

BGI is seeking to fund exponential growth led by the COVID-19 pandemic.

U.S Security Agencies have earlier alleged that the BGI Group has close ties to the Chinese government and Chinese government capital.

BGI runs a massive gene databank in China and has DNA sequencing contracts with health firms and universities worldwide.

According to a stock exchange filing on February 1, 2021, BGI Genomics, a subsidiary of the BGI Group that is listed on the Shenzhen stock exchange, has raised more than $300 million through a private placement with investors which includes China’s biggest state investment vehicle, the State Development and Investment Corp (SDIC).

Incidentally, SDIC is wholly owned by the China’s central government, which appoints directors to its board.

According to SDIC, the Central SOE Poverty Area Industrial Investment Fund, managed by SDIC Chuangyi, which again is a wholly owned venture capital subsidiary of SDIC, has paid ($30.8 million (200 million renminbi) for 1.4 million shares in BGI Genomics, giving SDIC Chuangyi a shareholding of nearly a third of 1% in BGI Genomics.

U.S. Security agencies have warned American labs against using Chinese tests for COVID-19 citing concerns that Beijing was seeking to gather foreign genetic data for its own research.

In its stock exchange filings, BGI Genomics said, the funds it raised will be used to ease pressure on working capital, as well as to upgrade its storage capacity for genetic data and to build a biological sample bank.

Huatai Securities and China Merchant Securities, two large Chinese state-owned securities firms, also took stakes in BGI Genomics.

After the placement, Huatai became the fifth-largest shareholder in BGI Genomics.

In a statement, BGI Genomics said its controlling shareholders continue to be private enterprises and individuals.

“At present, the shareholding ratio of SDIC Chuangyi in BGI Genomics is 0.3332%, which does not play a decisive role in the voting of motions,” said BGI Genomics in a statement.

A shareholder with this level of ownership “may not be able to appoint a director to participate in the decision-making of BGI Genomics, nor does it have any significant influence over BGI Genomics’ operations, strategies or other matters,” said the company.

Wang Jian, BGI’s founder and chairman holds 0.46% of BGI Genomics directly.

Two private companies associated with BGI Group control 45% of BGI Genomics shares.

($1 = 6.4555 Chinese yuan renminbi)



Categories: Creativity, Economy & Finance, Entrepreneurship, HR & Organization, Strategy

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