(Yicai Global) Oct. 24 -- Shares in Tianfeng Securities surged by the exchange-imposed limit today after the Chinese brokerage said that its two biggest shareholders have come to an acting-in-concert agreement whereby state-owned financial holding group Hongtai Group will serve as controller of the company.

Tianfeng’s share price [SHA:601162] closed up 5.2 percent at CNY2.99 (USD0.41). Earlier in the day it soared 10 percent to hit CNY3.12.

Hongtai, which holds a majority stake of 13.8 percent, and Wuhan Business Group, with 8.7 percent equity, have agreed that, as the largest shareholder, Hongtai’s opinion will hold sway in the case of a disagreement, Tianfeng said yesterday. None of the other top 10 shareholders hold more than 3 percent voting rights. The brokerage previously had a decentralized shareholding structure without a controlling shareholder.

Tianfeng can provide services and support for Hongtai’s main businesses or form its own independent market, people familiar with the matter told Yicai Global. The two parties can strengthen their cooperation in a number of areas such as equity financing, research think tanks, green finance and bond underwriting.

Hongtai, which is owned by the State-owned Assets Supervision and Administration Commission of Hubei Provincial People’s Government, is also the largest shareholder in Hubei Bank and the seventh-biggest stakeholder of Changjiang Securities. It owns 15 subsidiaries across a number of business segments.

“Tianfeng can take advantage of Hongtai’s investment network to reach strong-performing companies that wish to go public,” the source said. It can help such firms list on the Shanghai, Shenzhen and Beijing bourses as well as the National Equities Exchange and Quotations. It can also provide them with business restructuring, exchange refinancing and other services, he added.

Tianfeng’s investment banking business was the fastest growing in China in the first half, soaring 53.7 percent from a year earlier. Founded in 2000, the the Wuhan, central Hubei province-based broker ran 26 branches and 95 offices and had assets of CNY96.6 billion (USD13.3 billion) as of the end of last year.

Editor: Kim Taylor