New | Bank of East Asia under fire over Sumitomo Mitsui share placement
Ruling gives Elliott Advisors access to confidential documents of the deal
Bank of East Asia's HK$6.57 billion share placement to Sumitomo Mitsui Banking Corp was criticised on Friday in a High Court ruling that gives the green light to an activist fund manager's access to confidential deal documents.
Raising questions about the management of the family-run bank, Mr Justice Jonathan Harris wrote that he had "grounds for concern not only about the level of supervision that the [BEA] board provided, but also the motives behind the original proposed subscription".
Lawyers for US-based Elliott Advisors, which holds a HK$1.8 billion, 2.5 per cent stake in BEA, argued that last year's dilutive placement was unfair to minority shareholders. If the bank needed capital, it should have done a rights issue, they said, according to court documents.
"We are pleased that the court has recognised our concerns about the latest share issuance to SMBC and agreed that BEA should disclose to us information which is relevant to those concerns," Elliott said in a statement.
A spokesman for BEA said: "These are confidential documents but we respect the opinion of the court and … will seek to agree with Elliott which documents should be disclosed."
Under the court ruling, Elliott can request documents from BEA and refer back to the court if the documents are not delivered.