CRP directors accused of lying about joint venture

Minority shareholders of China Resources Power Holdings (CRP) have accused its directors of lying about the extent of its control over a coal joint venture, which was the centre of alleged breach of fiduciary duties by directors, the High Court heard.

Edward Chan, SC for six minority shareholders, told the court a letter supposedly written by CRP to Shanxi's Department of Land and Resources in 2010 said a wholly owned unit of CRP signed a "trust co-operation agreement" with Citic Trust in April 2010.

Under the agreement, Citic Trust holds a 31 per cent stake in China Resources Taiyuan (CR Taiyuan) on behalf of CRP.

Another letter supposedly written by Citic Trust to the department also said the stake was held on behalf of CRP, and that it could be transferred back to CRP within two years, Chan added.

"[CRP] said its [effective] interest [via various levels of subsidiaries] in the joint venture is only 25 per cent ... but we have discovered what was said by the company is false," Chan said.

By saying it only has 25 per cent interest, Benjamin Yu, SC for CRP, argued in October that it does not have control over the venture and its directors should not be directly held responsible for the joint venture's operation.