Shares of Dah Sing Financial Holdings fell 12.12 per cent yesterday as investors gave a decisive thumbs-down to the company's plan to spin off its banking operations for a separate listing. Many investment banks and brokerages cut their recommendations on the stock, saying the transaction would offer little, if any, value to minority shareholders while diluting their holdings. The banking operations are estimated to account for more than 90 per cent of Dah Sing's entire business, which includes insurance. BOC International said the proposal would be 'value destructive' as it would add a level of complexity to the shareholding structure, and lowered its rating to 'underperform' from 'outperform.' ING Financial Markets cut its recommendation to 'sell' from 'buy' saying it saw no purpose in the spin-off other than to entrench family control. It pointed out that holding company structures such as that proposed by Dah Sing tended to trade at substantial discounts to the value of their component parts. 'We are extremely displeased with a transaction that will create such a [holding company] discount, and dilute earning per share and return on equity in order to favour the controlling shareholder,' ING analyst Paul Sheehan said. Dah Sing said the spin-off was intended to make it easier for the new firm, comprising its banking operations, to access capital markets, acquire new businesses and to form alliances or joint ventures with related businesses in China. Analysts argued, however, that the whole exercise appeared to be an effort to ensure that managing director Derek Wong Hong-hing, whose family holds about 37 per cent of Dah Sing, would maintain control of the company. 'This allows the owners to raise capital and do an M&A transaction without losing control and without investing additional money,' Citigroup Smith Barney said. Under the proposed new structure, Dah Sing could trim its stake in the new company to as low as 51 per cent without impairing Mr Wong's control.