The battle over Golden Harvest intensified yesterday as Australia's largest entertainment company and 16 per cent stakeholder Village Roadshow launched legal action to block the film distributor's planned $56 million share placement to three investors. Village Roadshow filed a writ on Saturday against Golden Harvest and nine of its directors charging that the share placement was invalid and that the directors were acting with chairman Raymond Chow Ting-hsing to defraud minority shareholders. At a board meeting on June 15, Golden Harvest agreed to place 20 per cent of its shares to a consortium including Rupert Murdoch's 20th Century Fox, Robert Kuok's Kerry (Holdings) and Li Ka-shing. Village Roadshow stated in its writ the share placement proposal was invalid because the board had not been given enough notice, as required by company by-laws. In addition, Village Roadshow also stated the directors were 'acting in breach of their fiduciary duty . . . [as the share placement] was made not (as they later claimed) in order to raise general working capital . . . but rather for purposes contrary to the best interests of [the company]'. The Australian firm said that Golden Harvest planned to use the proceeds 'to facilitate the selling to [Golden Harvest] assets of a private company . . . owned by [Mr Chow]'. Village Roadshow claimed the sale would be 'to the detriment of all the other existing shareholders'. Golden Harvest finance director Raymond Chow Ping-kay said the company and directors named in the writ, including himself, were now seeking legal advice. Village Roadshow managing director Graham Burke, who also sits on the Golden Harvest board, would not return calls yesterday. However, in an interview with Australian media, Mr Burke said his company was taking the action 'because we feel that we and other shareholders have been treated improperly'. 'I believe our case is a fair and equitable one and will demonstrate for all time [that] legislation in Hong Kong and the courts no longer treats the public company sector as an old boys' club as in the 1960s,' Mr Burke said. When Golden Harvest was first listed in 1994, the company was split into two parts: the listed entity included film distribution, cineplex management and film lab operations, while film production and its vast film library remained private assets. One investment analyst said: 'Mr Chow said he was doing the shareholders a favour by keeping the volatile - but then-profitable - assets out of the public's hands.' He said profits from film production had been decimated as Asians were opting for better-made Hollywood products. Rival film producer Shaw Brothers had seen profits plunge and could report a loss this year, the analyst said. 'Village Roadshow must be thinking that Mr Chow wants to stem his personal financial pain and inject the film production company into the listed vehicle,' he said. Golden Harvest's falling out with Village Roadshow clouds the company's future as 156 of the 246 cinema screens it operates in Southeast Asia are joint ventures involving the two companies. The two have also committed to opening a further 85 screens together.