An Australian information technology company has become the first foreign investor to buy a university in China and incorporate the institution into its operations.
Perth-based Amnet Limited bought the privately owned Chongqing HaiLian University from its principal, Ling Xiao, for A$ million (£9.8 million) in cash and shares last year. The university includes three schools - for primary, secondary and vocational education - and offers degree courses including civil engineering, banking and finance, hospitality, information technology and performing arts.
CHU is based in Chongqing, a city of 7 million on the Upper Yangtze River.
The university enrols almost 5,000 students, 3,000 in its higher education division. But Professor Ling expected that, given the phenomenal growth in enrolments since the university opened in 2000, numbers would double within two years.
The CHU buildings were originally constructed for the Meridian Hotel chain as a holiday village. But in 1999, Professor Ling, who was then director of the Anhui education province, gained approval from the local education commission to buy the property to convert into an education institution.
Amnet chief executive Tony Kiernan met Professor Ling in Singapore last year. Amnet was exploring opportunities in Asia, and Professor Ling was looking for foreign partners who could help with development.
Following negotiations, Professor Ling agreed to sell CHU to Amnet in return for 34 million of the company's 67 million shares, making him the majority stakeholder. His shares are worth about A$10 million although, as part of the deal, Amnet also paid $15 million to Meridian as the remainder of the purchase price owed by Professor Ling and allocated A$2 million to the university to build extra facilities.
Amnet is publicly listed on the Australian stock exchange and owns 100 per cent of CHU's assets. The university operates under a Chinese government Sino-foreigner cooperation agreement.
Mr Kiernan said: "Once we were able to demonstrate our bona fides and capabilities, and were committed to Professor Ling's vision for the university, the Chongqing education commission and other government departments were very supportive."