Newbridge Capital has accused Shenzhen Development Bank (SDB) of failing to properly disclose its decision to disband a transitional management team, as the Californian-based fund's proposed takeover of the bank continues to unravel amid an increasingly bitter war of words.
The team was installed last year well in advance of Newbridge's purchase of about 20 per cent of SDB, which is listed on the Shenzhen Stock Exchange. Newbridge was slated to buy its stake from four companies under the Shenzhen municipal government, rather than from the bank itself.
The agreement had been heralded as a landmark transaction in the brief history of China's financial reforms, as it involved ceding control of a mainland bank to a foreign investor for the first time.
After its deal began to fall apart last month, Newbridge accused Taiwan's Chinatrust Commercial Bank of conspiring with SDB president Zhou Lin to sabotage the sale and sued the Taiwanese bank in a Texas court.
In a statement released yesterday, Newbridge said it only learned last month of a decision taken in January by SDB's board to disband the team. Newbridge has yet to receive a copy of the board's decision or see notice of it in the mainland media, which, Newbridge alleges, are violations of mainland listing regulations.
SDB and Shenzhen Stock Exchange officials could not be reached for comment yesterday.