How Billy Yung got the chop but regains his seal

It was with mixed feelings that Hong Kong businessman Billy Yung Kwok-kee watched shareholders in the former Shell Electric Mfg (Holdings) file out of the Conrad hotel on June 18.

The shareholders had just approved a change in the name of the company that his father founded in 1952 - to China Overseas Grand Oceans Group - bringing down the final curtain for Yung on a corporate drama that began unfolding in 2005.

But for other bigger offshore investors in China, 'the drama of dealing with mainland managers and minority shareholders continues', Yung said.

It was about five years ago that Yung retained mainlander Liu Zhan as general manager of Shell Electric's principal subsidiary and major asset, Everbright Real Estate.

He entrusted Liu with the running of the unit after Shell bought into Everbright Real Estate. In 2005, Shell acquired a 56 per cent stake in China Everbright Real Estate Development, controlled by state-owned China Everbright Group. At the time, China Everbright Group had been instructed to sell all of its non-core businesses as the central government had ordered state-owned banking and finance corporations to concentrate on their core businesses.

Shell later increased that stake to 70 per cent by buying an additional 14 per cent from the management of the company. The balance was held by a group of mainland investors. Yung was the legal representative of Everbright, but Liu ran the operation and importantly - as it was to turn out - had possession of the company's seal, used to stamp all documents. Everbright had by then accumulated a substantial development land bank of 170 hectares and its real estate division had branches in Guangzhou, Inner Mongolia, Beijing and Shanghai.