BEIJING, March 10, 2016 (GLOBE NEWSWIRE) -- iKang announces the submission of the report of the violation of anti-monopoly law by Meinian Onehealth Healthcare (Group) Co., Ltd. (“Meinian Onehealth”) and its ultimate controlling shareholder YU Rong, to the Anti-monopoly Bureau of the Ministry of Commerce of the People’s Republic of China (“MOFCOM”).
Meinian Onehealth recently announced their intention to purchase an aggregate of 72.22% of the equity interest in CiMing Health Checkup Management Group Co., Ltd. (“CiMing Checkup”) from Shanghai Tianyi Asset Management Co., Ltd. (“Tianyi”), Beijing Dongsheng Kangye Investment Consultancy Co., Ltd., HAN Xiaohong and LI Shihai, following which transaction, Meinian Onehealth will own 100% of the equity interest in CiMing Checkup.
According to Meinian Onehealth’s announcement, the purchaser (i.e., Meinian Onehealth) and one of the sellers in this transaction (i.e., Tianyi) is under the common control of an individual, YU Rong, who already acquired sole control of CiMing Checkup through the following two equity acquisition transactions in March 2015 and November 2015, respectively. In March 2015, YU Rong purchased 27.78% of the equity interest in CiMing Checkup through Meinian Onehealth, and subsequently in November 2015, YU Rong purchased 68.40% of the equity interest in CiMing Checkup through Tianyi. Upon the consummation of the foregoing two transactions, YU Rong indirectly held 96.18% of the equity interest in CiMing Checkup in aggregate and had gained de facto control over CiMing Checkup.
Under the Anti-monopoly Law of the People's Republic of China and the Provisions of the State Council on the Standard for Declaration of Concentration of Business Operators (the “Anti-monopoly Law”), an anti-monopoly report must be filed with and approved by the Anti-monopoly Bureau of the Ministry of MOFCOM if, during the previous fiscal year, the total turnover within China of all the business operators participating in the concentration exceeded RMB 2 billion, and at least two of these business operators each had a turnover of more than RMB 400 million within China.
iKang Guobin Healthcare Group, Inc. (“iKang” or “we”) is of the view that YU Rong already acquired sole control over CiMing Checkup after he purchased the 68.40% equity interest in CiMing Checkup through Tianyi in November 2015, which constituted concentration of business operators. According to the reports published by Meinian Onehealth, the revenue of Meinian Onehealth in China in 2014 was RMB 1.43 billion, and the revenue of CiMing Checkup in the same fiscal year was RMB 0.91 billion. The combined revenues exceeded the threshold of the anti-monopoly reporting stipulated under the Provisions of the State Council on the Standard for Declaration of Concentration of Business Operators. An anti-monopoly report must be filed with the Anti-monopoly Bureau of MOFCOM prior to the consummation of the second acquisition (i.e., the acquisition of the 68.40% equity interest in CiMing Checkup). However, to iKang’s knowledge, YU Rong and Meinian Onehealth have not submitted any report with MOFCOM with respect to the foregoing transactions to date. This constitutes a serious violation of the Anti-monopoly Law and relevant regulations promulgated by MOFCOM. Not only does it challenge the authority of law enforcement agencies, it also sets up an adverse precedent for other similar acquisition transactions in the market.
More importantly, we believe that Meinian Onehealth, CiMing Checkup and iKang are the three largest professional private medical examination institutions in China’s private medical examination industry. These acquisitions have changed the present competitive landscape in China’s private medical examination market, with the number of major competitors decreasing from three to two. The change will result in serious damage to the fair competition in the relevant markets and adversely affect the choice and bargaining power with medical examination service suppliers by downstream customers and end consumers.
To maintain orderly market competition, protect the interests of the consumers and the healthy development of China’s medical examination industry, iKang has formally submitted a written report to MOFCOM on the illegal acquisitions of CiMing Checkup by Meinian Onehealth and its ultimate controlling shareholder, YU Rong, without anti-monopoly clearance. As of the date hereof, the Anti-monopoly Bureau of the MOFCOM has accepted our report and accompanying materials. We expect, and are confident, that the Anti-monopoly Bureau of MOFCOM will dispense justice and impose penalty in accordance with Anti-monopoly Law.
IR Contact: iKang Healthcare Group, Inc. Christy Xie Director of Investor Relations Tel: +86 10 5320 8599 Email: firstname.lastname@example.org Website: www.ikanggroup.com FleishmanHillard Ruby Yim Email: email@example.com
Source:iKang Healthcare Group Inc