China Resources ignores calls from activist over mine 'irregularities'
Shareholder activist calls on China Resources chairman Fu Yuning to cancel coal mine deal
China Resources Holdings has refused to accept an open letter from former journalist and self-declared shareholder activist Li Jianjun calling for the state-backed conglomerate's new chairman Fu Yuning to cancel its power unit's three coal investment deals, which Li said were full of irregularities.
Speaking to reporters outside China Resources' headquarters in Wan Chai, Li, a former Shanxi Evening News journalist, urged Fu, who is not a director of China Resources Power Holdings, to use his influence to cancel the coal investments worth more than 30 billion yuan (HK$37.5 billion) that the power firm signed in 2007.
Li tried to enter the China Resources' headquarters building to hand in the letter, but was prevented by security guards. After 15 minutes of argument, Li left after slipping his letter through the gap between the door and the floor.
A CRP spokesman declined to comment.
"The project did not yield any meaningful output since 2007 … either CRP's management were fools or there were some dirty dealings," Li said.
The investments included a coal mine, railway and port project in Inner Mongolia, involving more than 10 billion yuan, he added.
Another is the 7.9 billion yuan acquisition of three coal mines in Shanxi and related processing and logistics assets in 2010, bought from Shanxi tycoon Zhang Xinmin.
Li said former CRP and China Resources chairman Song Lin had ordered that the assets be bought at a premium of several billion yuan despite the absence of valid mining rights. Song and Wang Shuaiting, also a former CRP chairman, have been placed under investigation for graft.
CRP earlier said the Shanxi government-led consolidation of the industry caused major delays in the extension of the mining rights.
Separately, Li said a coal mine development joint venture set up in 2009 by CRP with a firm controlled by another Shanxi tycoon, Xing Libin, also overpaid for coal mines by 2 billion yuan. He said his claims were based on information supplied by whistle-blowers at CRP.
Li's latest actions against CRP came a few weeks after Zhang gave an interview to a mainland newspaper, in which he said there was nothing wrong with the coal mining assets and the valuation at which he sold to CRP.
Sources close to China Resources earlier said they suspected Li was being funded by Lv Zhonglou, another Shanxi mining boss who last year lost a major legal battle with Zhang and also got beaten out by CRP in a coal mine acquisition in 2011.
They said Li and Lv wanted the Gujiao deal cancelled, which would hurt the cash-strapped Zhang. Li denied this allegation.