China Shanshui Cement Group , the largest supplier of the building material in Shandong province and the subject of an unsolicited 2015 takeover by rival China Tianrui Group Cement Co, is embroiled in a bitter dispute with a sacked executive in its Jinan subsidiary, as the hostilities over the acquisition spilled over into open confrontation. Four major shareholdings are battling it out for control of the Hong Kong-traded company, hampering efforts to restructure over 10 billion yuan (US$1.45 billion) of debt, and stymying the company’s recovery from a construction slowdown. Mi Jingtian, a former general manager at Shanshui’s unit in the Shandong provincial capital of Jinan, resorted to using pepper spray, smoke bombs and pressurised water cannons to repel the parent company’s executives when they tried to repossess the facilities, according to the cement maker’s statement to the Hong Kong Stock Exchange on Monday. On Saturday, Shanhui’s chairman Stephen Liu Yiu-keung and some independent non-executive directors went to the company’s Jinan premises, occupied by Mi and his associates. Liu and his fellow directors were held against their will, and suffered bodily harm by a group of unidentified crowd commanded and organised by Mi for over two hours, before being released through the help of local police, they said in their statement. “I was at the scene ... my shirt was pulled and I was beaten by some gangsters,” Liu said in a phone interview with the South China Morning Post . “Some of our independent director were pushed to the ground.” Mi disputed Shanshui’s statement, according to Bloomberg, citing a telephone interview with the former executive. It was Shanshui’s chairman Liu who organised more than 600 people to occupy Shandong Shanshui’s headquarters, Mi was cited in saying. Liu denied Mi’s claim, saying he and the directors were merely trying to assert their legitimate right to reoccupy and repossess Shanshui’s assets. “Our premises have been illegally seized by the sacked managers and their associates,” Liu said. The confrontation is the most dramatic flash point in Shanshui’s ongoing, two-year fight between shareholders for control of the board and its principal assets. The firm, listed in 2008, is 28.2 per cent owned by Tianrui, 25.1 per cent by China Shanshui Investment, 21 per cent by Taiwan-listed Asia Cement Corp and 16.7 per cent by state-backed China National Building Materials. Shanshui Investment is majority owned by a trust representing 2,600 employees with former chairman and founder Zhang Caikui ( 張才奎 ) as trustee, and the rest held by various management shareholders including Mi. Liu is managing director of transaction advisory services at EY’s Hong Kong office and is the court-appointed receiver for Shanshui Investment. Multiple law suits had been filed in Hong Kong between Zhang and Shanshui staff, and former senior management shareholders in disputes over a share buyback scheme proposed by Zhang. Tianrui, based in Henan province, snapped up Shanshui shares from the open market in 2015, raising its stake to 28.2 per cent from 10.5 per cent in the span of 10 days to become the controlling shareholder. Tianrui’s aggressive acquisition triggered a halt in the trading of Shanshui’s shares, as it reduced the public float of the stock to below the 25 per cent minimum required by Hong Kong’s listing rules. Shanshui’s shares last changed hands at HK$6.29 on April 15, 2015, close to a three-year high. Tianrui ( 天瑞集團 ) succeeded in late 2015 to expel Zhang, as well as representatives of Asia Cement and China National Building from Shanshui’s board. But the ousted shareholders subsequently defeated Tianrui’s plan to dilute their holdings through a stock sale at a 92 per cent discount. After his ouster, Zhang had initially put up a fight by resisting the board’s efforts to wrest management control over the Jinan assets, and was alleged to have stolen company assets, including the company seal. His management role was subsequently taken over by Mi and other managers at the Jinan unit last year. However, things took a turn for the worse since December 2016, when Mi was accused by the board of misconduct, including making unauthorised, inaccurate representations to the media of the Jinan unit’s financial status. He was suspended from his duties and subsequently fired. Other management shareholders have also been sacked. Liu, who said he represents the interest of Shanshui’s bond and debt-holders, said Mi and his associates have been acting without the board’s approval “in the name of shareholders’ activism” amid signs the company’s fortune was turning around. Shanshui is a long way off from resolving its feud for control, said CLSA head of China materials research Daniel Meng. “The cement sector’s recovery from the industry downturn has made it even more challenging for the major shareholders to compromise on relinquishing shareholding or management control, since each party insists on a higher valuation to exit the company,” he said. Shanshui had been reporting losses in the past two years, as its management had been distracted by the boardroom fight. Still the company had reported operating profits last year, and its industry ranking had inched up a notch to sixth position, Meng said. Shanshui will request the Jinan city government and the Changqing district government to investigate into Mi’s actions and appoint legal advisers in mainland China and Hong Kong to take actions him for the illegal occupation and criminal actions, the company said on Monday.