Fosun in court over Bund project

Shanghai-based Fosun International Ltd took three other real estate giants to court Thursday in a dispute over whether it had the right to be the first to purchase its partners' stakes in a project to develop a 9.22 billion yuan ($1.48 billion) site on the Bund, local media reported.

Fosun, which owns a 50 percent share in the project, argued that its fellow stakeholders, Hangzhou-based Greentown China and Shanghai Zendai Property, circumvented its priority rights to buy their shares when they sold their subsidiaries that owned the shares to the Beijing-based commercial real estate developer SOHO China.

Shanghai No.1 Intermediate People's Court did not announce a verdict Thursday.

The site of the planned project, which will be called the Bund International Financial Center, is a 45,472-square-meter plot of land near the Bund in Huangpu district, according to the Shanghai Evening Post.

In court, the plaintiff's attorney said that Greentown China and Shanghai Zendai had informed Fosun on December 22, 2011, that they were willing to sell it their stakes in the project for 4.26 billion yuan.

At the time, Shanghai Zendai owned a 40 percent stake in the project and Greentown China owned a 10 percent stake.

The attorney for the defendants said that Greentown China and Shanghai Zendai had talked to Fosun about selling it the shares, but Fosun's offer was too low and no deal was struck.

The attorney said that Fosun wanted to lowball the companies for their stakes so it could resell them and make a larger profit. Fosun later learned that Greentown China and Shanghai Zendai had reached an agreement with SOHO on December 23.

On December 27, Fosun asked SOHO for 500 million yuan to compensate it for the loss of its rights to purchase the other companies' stakes in the project, but SOHO refused.

On December 29, SOHO announced it would purchase the subsidiaries of Greentown China and Shanghai Zendai that owned the companies' stakes in the project, making SOHO the owner of 50 percent of the project.

Fosun's attorney said that the sale violated his client's right to be the first to buy Greentown China and Shanghai Zendai's stakes in the project.

However, the defendants' attorney said that Fosun had no right to interfere with the sale as it was not a shareholder of Greentown China or Shanghai Zendai's subsidiaries.