Fosun wins court fight over sale of stake in Bund 8-11
Soho China must return 50pc of development project in Shanghai it bought to the vendors
Fosun International has won a court order on the mainland forcing the developer Soho China to return to the vendors the 50 per cent stake it bought in a project in Shanghai.
Soho China said the Shanghai Intermediate People's Court issued a judgment yesterday ordering it to return its interests in Zendai Wudaokou and Greentown Hesheng to Shanghai Zendai Property and Greentown China, respectively.
The court found the vendors' agreement to transfer their interests in the two firms to Soho China was invalid.
Zendai Wudaokou and Greentown Hesheng together own 50 per cent of a project at the Bund 8-11 commercial site, the remaining 50 per cent being owned by Fosun.
Fosun's shares rose after the announcement by 4.5 per cent to close at HK$5.34 yesterday. Soho's shares fell 0.89 per cent to close at HK$6.70.
Soho, Shanghai Zendai and Greentown China released a joint statement saying they would appeal to the Higher People's Court of Shanghai.
"We feel disappointed and regret the judgment. We hope Fosun International will give up the monopoly and resolve the business dispute," they said.
Soho said it still held its interest in the project, as "the trial judgment cannot be enforced and will not become effective pending the results of the appeal".
It said the ruling would not have a material adverse effect on the firm's operations and financial position.
In 2010, Shanghai Zendai acquired the site for 9.22 billion yuan (HK$11.6 billion) and sold 50 per cent to Fosun International for 7 billion yuan, and 15 per cent to Greentown China and a partner firm.
In 2011, Shanghai Zendai and Greentown China, with its partner, sold their shares in the project to Soho for 4 billion yuan.
However, Fosun International immediately announced that it was surprised by the proposed transfer of the stake in the project to Soho.
It said it enjoyed pre-emptive rights to buy the remaining shares owned by the consortium and, if necessary, would take legal action to defend its interest. It did so last year.
Shanghai Zendai said it had taken into account the commercial terms offered by other potential investors, including Fosun, when it considered the deal.