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Shareholders snub cash offer

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The retired Shenzhen judge's deal undervalued Shanghai Merchants

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A cash offer for shares in Shanghai Merchants Holdings triggered by Chau Ching-ngai's $11.5 million sale of his stake to a retired 35-year-old Shenzhen judge has been rejected by the majority of independent shareholders.

The offer by Profit Harbour Investments, a British Virgin Islands company owned by Yue Jialin, was taken up by stakeholders representing just 0.39 per cent of the issued share capital of Shanghai Merchants.

Shanghai Merchants, in receivership following the disappearance and subsequent arrest of Chau on the mainland, was valued at $18.21 million under the offer, equivalent to an 83 per cent discount on the company's shares.

Mr Yue, a former magistrate at the Luohu District People's Court in Shenzhen, is now left with a 63.58 per cent stake in the company.

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According to a company announcement yesterday, Profit Harbour has appointed a law firm in Bermuda to seek a court order to remove partners from Grant Thornton in Hong Kong as receivers of Shanghai Merchants.

It would then appoint Mr Yue and Brent Lau Yau-cheung - the manager of a money-lending company in Hong Kong - to act as directors of the company, according to the announcement.

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