Failed toll-road tycoon Liu Genshan has become embroiled in another legal dispute less than two months after a Shanghai highway operator sued several companies he owned, seeking several billion yuan in compensation.
Shanghai Nanhuan Highway Construction Development is suing Liu's companies in the Shanghai No1 Intermediate People's Court, accusing them of leaving state-owned shareholders to shoulder the company's debts, according to Caijing magazine.
'The case is very sophisticated because it involves complicated asset manipulation,' said a source. 'It came down to the point of whether a new shareholder should take over the massive debts left by the old ones.'
Nanhuan was established in 2003 by Liu, 51, and several state companies, taking charge of the construction of three major parts of the city's highway.
The company secured bank loans worth more than 3 billion yuan (HK$3.42 billion) but the project suffered losses after the toll roads began operating.
Caijing said Nanhuan posted a loss of 126 million yuan in 2006.