Tokyo’s Stock Exchange (TSE) Is “Troubled” By A Crypto Firm’s Acquisition Plans

Omar Faridi
  • Noah Ark Technologies, a company planning to launch crypto exchanges in Japan, is looking to acquire Beat Holdings, a Tokyo Stock Exchange (TSE) listed company.
  • The TSE is reportedly "troubled" by the planned acquistion because it feels crypto-related businesses are too risky for investors.

Noah Ark Technologies Ltd, a Hong Kong-based company that intends to launch cryptocurrency exchanges in Japan, is reportedly looking to acquire Beat Holdings, a financial information and services provider. Notably, Beat Holdings is listed on the Tokyo Stock Exchange (TSE) and the bourse feels “troubled” by this planned acquisition, according to one of its officials.

On July 19th, Noah Ark Technologies became the major shareholder of Beat Holdings, which was just a month before the company requested Beat Holdings to add “Noah Coin” to its name - a cryptocurrency that was created by Noah Ark’s development team.

Tokyo’s Stock Exchange Is Cautious Of Digital Currencies

Moreover, the Hong Kong-based firm also proposed that Beat Holdings allow it to have 50% voting rights by issuing more shares and acquisition rights for the new shares.

It might seem that Tokyo’s stock exchange would want to encourage foreign businesses to invest in Japan, as the TSE has been quite receptive to companies from abroad that want to contribute to the nation’s $5 trillion economy.

Noah Ark Technologies, however, is a crypto-related firm and Tokyo’s bourse is wary of digital currencies because they are not yet properly regulated - a factor the TSE thinks makes them a highly risky type of investment.

Also playing a role in the TSE's reticence is the fact that Noah does not currently have regulatory approval to provide crypto services in Japan.

An Attempt To Gain More Credibility

Moreover, if Noah decides to make Beat one of its subsidiaries, it has the potential to become a cause for concern for Beat's existing shareholders, presumably because some investors in Japan still question the legitimacy of crypto-related businesses.

Beat Holdings’ registered office is located in the Cayman Islands, and it currently offers healthcare services and also specializes in the management of intellectual property. At present, the company’s market capitalization is around $90 million (10 billion yen) and its shares are actively traded on the TSE.

Beat's CEO Lian Yih Hann told the Nikkei news outlet during a phone interview that Noah’s takeover plans are an attempt by the company to gain more credibility because its shares would be listed on the TSE.

Plans For $1 Billion ICO

Noah’s management is reportedly looking to launch several crypto-related services with its planned acquisition of Beat. The Cayman Islands registered firm has said that it will launch cryptocurrency exchanges in the US, China, Europe, and Japan. It is also planning to raise $1 billion through an initial coin offering (ICO).

Additionally, the company aims to help Filipino professionals working abroad in sending money to their home country by using Noah Coin (NOAH). According to Noah, this initiative was supported by the Philippines’ government, however, the nation’s embassy in Japan said in March 2017 that the Hong Kong-based firm has “not [been] issued authorization” for the project.

According to the embassy, Noah did not appear to have offices in the Philippines, even though the company had provided a Philippine address to the Securities and Exchange Commission (SEC in Philippines).

Many veterans of Tokyo’s financial markets would recall that Beat Holdings was previously known as Xinhua Holdings Ltd or Xinhua Finance. However, Xinhua Finance’s shares were delisted from the TSE in 2011 because of fraud allegations, and its executives were sentenced by a US court in 2013 after being charged with insider trading.