Disputes between steelmaker China Oriental Group's two biggest shareholders have escalated after its chairman claimed that his signatures on a number of deals three years ago with a company held by the second-largest shareholder were forged. Han Jingyuan, the chairman and chief executive of China Oriental, in a statement filed with the stock exchange yesterday said that one co-operation agreement and two letters of appointment between Hebei Jinxi Iron & Steel and Pioneer Metals (Group) were unauthorised. Jinxi Iron is a China Oriental subsidiary while Pioneer is controlled by China Oriental's second-largest shareholder and vice-chairwoman Chen Ningning. The dispute surfaced after Ms Chen, who owns 28 per cent of China Oriental, said in February she was in talks with Wellbeing Holdings to take a controlling stake in China Oriental to be followed by a buyout offer. Ms Chen's buyout attempt failed when Wellbeing Holdings, which is held by Mr Han and owns 42 per cent of China Oriental, said in April the talks had ended. She is the mainland's third-richest woman. Mr Han yesterday said that the unauthorised agreement and two letters, dated October 2004, included the appointment of Pioneer as China Oriental's exclusive agent to buy and import iron ore. He signed the undated version of the agreement and letters but these were scrapped in November 2004, Mr Han said, adding that he had not signed any dated documents related to those deals. The signatures on the dated papers were photocopies of his original signatures in the undated version, according to the Crime and Science Technology Lab of the Tangshan Municipal Public Security Bureau, he said. As a result, Mr Han said he and Jinxi Iron management believed that the dated documents were 'created without ... knowledge or consent'. Mr Han said China Oriental's board was unaware of its business operation having been adversely affected by the existence of such documents but would launch an investigation. It was difficult to estimate how long the investigation would last but the board had decided to take no action until it was complete, Mr Han said.
