(Yicai Global) Dec. 24 -- Hunan TV & Broadcast Intermediary has abandoned plans to sell a CNY208 million (USD30 million) oil painting to recoup losses after regulators began questioning the value of the piece, whose sale could have prevented the firm being red-flagged on the Shenzhen Stock Exchange.
The firm is no longer selling Foolish Man Removes the Mountain, by renowned artist Xu Beihong, "to fundamentally avoid misinterpretation and speculation," it said in a statement yesterday. The deal had been set to close on Dec. 28.
While many Chinese companies tend to sell off property or other valuable assets at the end of the year in a bid to enhance their bottom line, Hunan TV was attempting to sell the artwork to negate the CNY135 million it lost over the first three quarters of this year. The firm lost as much as CNY464 million in 2017, and if it posts a second straight year of losses it will be labeled on the SZSE as at risk of a forced delisting.
Its largest shareholder Hunan Broadcasting System agreed to buy the painting last week, but sparked an inquiry from the bourse as just six months earlier bidders at a public auction were unwilling to meet a CNY190 million reserve.
Art sales have been a major part of Hunan TV's operations since 2006, it said in the statement, adding that it has invested over CNY1.2 billion (USD174 million) on over 200 pieces in the past decade or so, including influential works by Chinese calligraphy masters. The firm has sold off several works and made handsome returns in recent years, it said.
Foolish Man Removes the Mountain is regarded as one of the most influential pices by Xu, whose signature style is a fusion of Chinese and Western techniques. Created in 1940, the 46 centimeter by 107.5 centimeter painting has seen multiple owners and lived through World War II. Hunan TV purchased it for CNY28 million (USD4.1 million) at auction in 2007.
Editor: James Boynton