Brilliance Auto

Brilliance accused of issuing false statements

PUBLISHED : Tuesday, 14 January, 2003, 12:00am
UPDATED : Tuesday, 14 January, 2003, 12:00am

A complaint has been lodged with the securities watchdog against Brilliance China Automotive Holdings, alleging the company made false statements and sold its controlling stake at an inappropriate price.

Law firm Chiu & Partners sent the letter to the Securities and Futures Commission on behalf of an anonymous party.

The letter accused Brilliance China of having issued 'false and misleading' statements in which the company denied mainland authorities would take back control of the company.

Brilliance China declined to comment yesterday.

The company last year denied any knowledge of the Liaoning provincial government's attempt to take control after a mainland newspaper reported a possible deal in May.

In November, Brilliance China admitted its directors had been aware that the Liaoning government had been in discussions with the company's former controlling shareholder since 2000 about the possibility of buying shares.

Last month, the provincial government agreed to pay HK$144.61 million to take control of Brilliance China at a 93.1 per cent discount, despite protests from the company's ousted founder.

The provincial government, which has been in a bitter dispute with founder Yang Rong over control of the company for more than seven months, agreed to buy a 39.45 per cent stake in the maker of cars and minivans from the Chinese Financial Education Development Foundation.

The letter accused the company of having breached listing rules when the Liaoning government acquired statutory control without making a mandatory general offer at an appropriate price.

The law firm said the price the Liaoning government paid for the controlling stake was 'uncommercial and artificially engineered'.