What’s new: Apollo Future Mobility Group Ltd., a Hong Kong-traded investment company with China backing, announced the sale of its holding in an American 3D printing company citing concerns over U.S. national security scrutiny.
The company said it will sell its entire 12.87% stake in Divergent Technologies in a deal expected to cost it a record loss of HK$106 million ($13.6 million).
Apollo Future Mobility's stake in Divergent Technologies exceeds the foreign ownership limit set by U.S. regulations, hindering the 3D printing company from obtaining U.S. classified defense contracts. Consequently, Divergent Technologies has asked Apollo Future Mobility and other foreign shareholders exceeding the limit to divest, the Hong Kong firm said.
Citing its major shareholders’ connection with the Chinese government, Apollo Future Mobility said the holding in a U.S. military supplier may expose the company and its shareholders to risks of potential U.S. regulatory scrutiny and penalties.
Background: Formerly known as WE Solutions, Apollo Future Mobility counts high-profile businesspeople from the Chinese mainland, Hong Kong and Macao as major backers.
Its largest shareholder is British Virgin Islands registered investment firm Prestige Rich Holdings Ltd., with 27.79% stake, followed by Freeman Shen, founder of Chinese electric vehicle startup WM Motor. Justin Ho King-man, the son of former Macao Chief Executive Edmund Ho Hau-wah and a lawmaker in Shanghai, owns 21.78% of the company. Other investors include China’s state-owned Shanghai Alliance Investment Co. Ltd.
Apollo Future Mobility’s business focuses on investments and expands to designing, developing, manufacturing and electric vehicle sales. The company also operates in jewelry and watches sales, as well as lending services.
Divergent Technologies, incorporated in Delaware, specializes in 3D printed structural tools using proprietary hardware and software. The technology used by Divergent Technologies is classified by the U.S. government, and the company has been applying for a clearance from the U.S. government to obtain classified defense contracts.
Contact reporter Han Wei (weihan@caixin.com)
