THE board of Shenzhen Gintian Industry has yielded to minority shareholders' demands and changed its new share issue and cash payout away from cash dividends in favour of more free stock. The revised offer comes after shareholders rejected the board's initial offer last month, in what was the first time directors of a Shenzhen-listed company were voted down. Share investors in China favour bonus issues instead of cash dividends. The rebellion followed a challenge by shareholders to directors of another Shenzhen-listed company, China Vanke Co, and brokers said it reflected wider jitters about mainland management competence. The Gintian board originally proposed a one-for-10 bonus issue, cash dividend of four yuan a share and a two-for-10 rights issue at 5.3 yuan a share. However, minority shareholders rebelled and proposed to adjust the offer to a two-for-10 bonus issue, a cash dividend of one yuan and a one-for-10 rights issue at four yuan a share. Following a shareholders meeting, Gintian is now proposing a one yuan cash dividend and four-for-10 bonus issue. Gintian's large shareholders had preferred a share dilution that would drag down the company's share price in the short term and give them a chance to start pushing its price back up over the longer term. Trading of the A shares and B shares in the company on an ex-rights basis will begin on May 20.
