More questions raised in CRP case
Papers show rights over mainland mines at centre of claims were transferred only in July
The mystery of alleged negligence by management of China Resources Power in the firm's 2010 acquisition of coal-mining assets in Shanxi province has grown murkier. Official documents show that exploration rights of two mines were transferred by the seller to CRP late last month.
The documents could be used as evidence by lawyers representing six CRP minority shareholders to bolster their allegations of mismanagement in a petition to be heard today in Hong Kong's High Court.
"The documents show the seller didn't have proper exploration rights to sell the assets to CRP," a person familiar with the case told the .
The minority shareholders allege that 20 former and current CRP directors failed in their fiduciary duties to protect shareholders' interest by causing CRP to buy two coal mines without exploration and mining rights, and failed to cancel the deal and recover money from the seller.
According to CRP's annual report, it agreed in 2010 to form a 49 per cent-controlled joint venture with Citic Trust - a unit of state-owned conglomerate Citic Group - and the mining assets' seller, Shanxi businessman Zhang Xinming's Shanxi Jinye Coal Coking Group.
The writ, filed on July 5, said Jinye injected a 20 per cent stake in the portfolio of assets in exchange for a 20 per cent interest in the venture; while Citic Trust contributed cash for a 31 per cent stake and CRP paid cash for its 49 per cent stake. The venture agreed to buy the remaining 80 per cent of the assets for up to 7.9 billion yuan (HK$12.1 billion). But government documents showed the exploration right of a mine in Zhongshe expired in late 2007; while that of the other mine, in Hongyatou, expired in early 2009, the writ said. No application was made to renew those permits, the writ added. "Shanxi Jinye had no right or capacity to transfer the exploration rights to [CRP]," it said.
