A year ago, Lai Zhengjian was among the minority shareholders of Ping An Insurance (Group) who opposed the company's plan to raise 160 billion yuan (HK$181.41 billion) by issuing shares and convertible bonds. 'The scale of fund-raising is too big to swallow,' Mr Lai told reporters after a closely watched shareholders' meeting in March last year. 'They cannot take money from shareholders without even explaining where the money will go.' Mr Lai, like many other mainland shareholders who invested in Ping An when it went public two years earlier, counted on the stock to generate hefty returns, only to experience a roller-coaster ride as the company embarked on an ambitious expansion programme. The financing plan, which at the time was one of the world's largest stock offerings ever, received support from Ping An's majority shareholders, including HSBC Holdings. Subsequent widespread concern about a glut of shares in the mainland equity market forced Ping An to shelve the plan, but it did not escape accusations that it had, in part, triggered the market's free fall. One year on, the insurer is not only still suffering the overhang of the aborted share offer but is now entangled in another controversy, from the other side of the table. It has become a shareholder opposing the break-up of Fortis, the Belgian-Dutch financial group that was partly nationalised before French rival BNP Paribas agreed to buy the remainder. Like other banks, Fortis has been stung by the credit crisis, but its many investors, such as Ping An, are upset by the Belgian government's decision to sell the remains of Fortis in a cheap, rushed deal. 'Clearly, Ping An wants to get something out of this mess, if not the quick return on its investment it originally hoped for,' said Olive Xia, an analyst with Core Pacific-Yamaichi International. Shareholders, including Ping An, voted down the original Fortis rescue plan at a meeting last month. Many analysts said it was just a temporary victory for Ping An, since Fortis would face a capital gap of Euro2.3 billion (HK$22.66 billion) after the reform proposals were voted down, and the risks of the company going bankrupt were high. Fortis chairman Jozef De Mey will travel to the mainland to meet Ping An officials as his company begins to explain to its biggest shareholders the revised agreement reached at the weekend with BNP Paribas. Mr Lai said many small shareholders of Ping An supported the company's go-global strategy but blamed it for doing the right thing at the wrong time. 'Looking back, it was definitely the wrong time for ambitious expansion plans,' he said. 'Ping An failed to assess the proper level of risk when the global stock markets peaked. The 7 per cent dividend return from Fortis [expected by Ping An] was merely a bull-case scenario.' The value of Ping An's stake in Fortis has fallen more than 70 per cent since it paid US$2.5 billion for 4.18 per cent of the company in November 2007, which it later raised to 5 per cent. Fortis fiasco Insurer is an unhappy spectator to the firm's drawn-out disintegration The value of Ping An Insurance (Group)'s 5 per cent stake in Fortis has fallen: 70%
