Everbright in Palace coup as PLA exits

PUBLISHED : Friday, 26 March, 1999, 12:00am
UPDATED : Friday, 26 March, 1999, 12:00am

The People's Liberation Army yesterday formally transferred to China Everbright Group its controlling share in one of Beijing's best-known hotels, the Palace.

In one of the most visible signs of the military's withdrawal from business, officers of the PLA's general staff handed over its 60 per cent stake to Everbright officials at a ceremony at the 530-room five-star hotel.

Hotel officials were unable to say if the PLA received anything in exchange for its stake, worth tens of millions of dollars.

'There was no talk of any financial arrangement, but we do not know,' one official said.

Sources close to China Everbright said no money had changed hands.

The other shareholders in the hotel remain the same: Hong Kong Construction Holdings and the Hong Kong and Shanghai Hotels, each of which holds 20 per cent.

The unlisted China Everbright group, through its Hong Kong-listed subsidiary China Everbright International, has the controlling stake of 35 per cent in Hong Kong Construction Holdings.

This means that effectively China Everbright now controls 80 per cent of the hotel.

Sources said yesterday it was too early to say how the group would deal with the newly acquired stake.

The Peninsula Group-managed Palace expects no change in daily operations.

The central Beijing hotel opened in 1989 and endured two difficult years after the military crackdown on student protests in June 1989.

It has hosted many heads of state and company chiefs.