China Shanshui Cement new loans suspended

China Shanshui Cement new loans suspended
Published: 11 June 2015

Tagged Under: China Shanshui Cement China 

China Shanshui Cement Group Ltd said some banks have halted new loans and suppliers are demanding immediate repayment after a court put one of the cement maker’s main shareholders into receivership, Bloomberg reports.

Some joint venture partners have also said they wanted to review their relationship with the company, Shanshui Cement said in a statement Wednesday in Hong Kong.

The firm’s finances are likely to be impacted by the actions amid lawsuits against China Shanshui Investment, which controls a quarter of the cement maker, said Shanshui Cement. The dispute led to Hong Kong’s High Court last month appointing receivers for more than 40 per cent of China Shanshui Investment, in the nation’s latest corporate governance conflict.

Shandong-based Shanshui Cement said last month that more than 2,400 employees have filed lawsuits in Hong Kong since August against an ex-director Li Yanmin, and founder Zhang Caikui, who owns 38.5 per cent of China Shanshui Investment. The claims include a misappropriation of share interests those employees owned.

The court subsequently appointed receivers over 43.3 per cent of China Shanshui Investment’s shares not owned by the two individuals, Shanshui Cement said in a 21 May filing.

Henry Li, the cement maker’s head of finance, said some employees involved in the lawsuit had told banks and suppliers that Zhang Caikui and Chairman Zhang Bin were leaving the firm. Li said both men are still with the company.