Objection by major shareholder puts block on Singapore company becoming a 10pc strategic investor
The investment arm of the People's Bank of China, China Huijin Investments, has blocked a plan by Singapore's Temasek Holdings to take a 10 per cent stake in the Bank of China (BOC).
'Huijin is BOC's major shareholder and at present it does not agree with Temasek becoming a strategic investor,' a senior China Banking Regulatory Commission official told the South China Morning Post.
The eight-member board of directors at Huijin, which controls 78.15 per cent of BOC, voted to reject the deal because Temasek's investments were seen as excessive, according to a report in Caijing magazine.
It is not clear if Huijin's decision is final, or can be reversed if Temasek restructures its proposed investment.
Temasek, the investment arm of the Singapore government, announced on August 31 that it would pay US$3.1 billion for a 10 per cent stake in BOC and had undertaken to subscribe for an additional US$500 million worth of shares during the bank's initial public offering, due in the first half of next year.
In a statement, BOC noted that its agreements with strategic investors were subject to approval but maintained that 'the approval process is proceeding normally'.
