Li Jianjun claims more CRP coal irregularities
Li Jianjun, the former Shanxi province journalist who accused China Resources Power Holdings' former chairman Song Lin of overpaying for a basket of Shanxi coal related assets, will publicly demand the cancellation of more than 30 billion yuan (HK$37.4 billion) of coal investment deals he claimed had harmed the interest of minority shareholders.
"I will hand to China Resources Holdings an open letter calling on new chairman Fu Yuning to cancel three of CRP's coal investment deals that were fraught with irregularities and have damaged shareholders' interests," Li said. "If he does not do something about it, in the next round of minority shareholders' lawsuits, Fu will be a target."
An official at China Resources Holdings said the company had no comment. CRH is the parent firm of CRP, while Fu is not on CRP's board.
In January, six minority shareholders withdrew their claim of a breach of fiduciary duties by former and current CRP directors after a High Court judge rejected an application to add new allegations to the original complaint.
Li said he would hold a briefing outside CRH headquarters today to reveal more details about the alleged irregularities.
His previous accusations focused on CRP's 7.9 billion yuan acquisition of three coal mines and related assets in 2010 from Zhang Xinmin. He claimed the assets were overvalued by several billion yuan, and that the management had failed to cancel the deal after the seller failed to obtain valid exploration and mining rights. The management blamed the government's industry consolidation for the failure .
Li's latest accusation included the Wujianfang coal mining project in Inner Mongolia, whose development rights were won by CRP in 2007, as well as its coal joint venture with Shanxi mining tycoon Xing Libin. Analysts said the management told them in 2007 that Wujianfang was a promising asset, but two years later were told the heating value of the coal was only 60 per cent of what was then claimed.
The mine was scheduled to start production with an annual output capacity of 8 million tonnes, but an analyst said the actual production was much lower.
Song and Wang Shuaiting, both ex-CRP chairmen, have been under graft probes in recent months.