“We have already applied to the Commercial Crime Bureau (CCB) of Hong Kong to investigate possible criminal activities including false statement, fraud, and threatening investors by Zhao Xiangti and others,” former chairman and chief executive Sun Zhongguo, and former chief operating officer Trevor Strutt said in a statement published on yingdeshareholders.com.

“We have also applied for the safeguard for the chops and financial records of the company so that no one will disrupt the normal daily operation of Yingde.”

The CCB said it has officially accepted the case and started an investigation.

The police had received “a report on March 2,” the bureau said in an emailed statement in response to the Post’s enquiry. “After initial investigation, the case is classified as a request for police investigation. Investigation by [the bureau] is underway.”

A statement issued by Yingde on Tuesday said: “Mr Zhao has informed the company that these allegations are baseless and spurious. Mr Zhao further asserted to the company that he believes the allegations are nothing more than a diversionary tactic, deliberately announced one day before the EGMs (extraordinary general meetings), to distract all parties from the ongoing sale process.”

Sun and Strutt, who were stripped of their executive roles at a November board meeting in their absence, have not responded to the Post’s request to elaborate on the circumstances of the alleged “criminal activities,” specifically which “investors” were “threatened” or to name the party to which an application was made to safeguard the company’s properties.

Yingde is one of China’s largest suppliers of industrial gases, mainly to steel and chemical makers.

The dramatic latest twist - following four months of public acrimonious exchanges of allegations between the two groups - comes as PAG Asia Capital, became the first potential investor to announce that it has made a binding offer.

PAG, one of the region’s largest private equity firms, managing some US$16 billion of assets, has offered to buy all the Yingde shares it does not already own at HK$6 each.

That’s 92.5 per cent higher than the six-month average price prior to December 23, the last trading day before Yingde’s American rival Air Products’ expressed a non-binding interest in buying shares at HK$5.5 to HK$6 each.

Air Products has been conducting due diligence on Yingde for the last two weeks and has yet to put out a binding offer, although it has reiterated its interest in a takeover that it said would make “significant strategic and financial sense.”

As a listed company and an industry player, any offer from it is expected to be subject to approval by its shareholders and antitrust regulators in China.

Shares in Yingde had almost tripled since January, with four times more shares changing hands every day during the period than in the whole of last year.

Trading has been suspended since Monday, but will resume trading on Wednesday, the company said on Tuesday night.

PAG’s cash offer will stick as long as PAG and the parties acting in concert with it together own voting rights of more than 50 per cent of Yingde’s shares by the time the offer closes.

“The offers [to holders of Yingde shares and share options] are not subject to any regulatory approval, in particular [from] the Ministry of Commerce [of China],” David Kim, director of PAG’s fund management unit PAGACII-2 said in a statement published in a filing by Yingde to Hong Kong’s bourse.

PAG plans to fund the takeover through debt financing and internal resources.

Sun and Strutt on February 27 signed an “irrevocable undertaking” to accept the offer. They were joined by Zhao a day later.

Together the trio owns 41.9 per cent of Shanghai-based Yingde, while PAG currently owns 0.69 per cent.

PAG said it intends to nominate personnel with “relevant industry experience” as chairman, chief executive and executive directors of Yingde, and help “optimise its capital structure.”