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Developers fight over ownership right of prime site
By Feng Jianmin |
November 30, 2012, Friday
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Print Edition
Print Edition
A DISPUTE over ownership of a prime location on the Bund in Shanghai saw lawyers for two property companies indulge in heated court debate yesterday.
Fosun Group, headed by billionaire Guo Guangchang, is suing SOHO China, a major commercial real estate developer, and other parties for breaching Fosun's rights to acquire a major stake of the Bund plot.
Shanghai Zendai Property Ltd bought the land in 2010 for 9.22 billion yuan (US$1.5 billion), the most expensive plot on the Bund at that time.
Fosun then bought a 50 percent stake, with the balance shared by affiliates of Zendai and another property developer Greentown China Holdings.
They are the other parties referred to in the lawsuit.
Fosen says it has a contract that stipulates the other parties cannot sell their holdings to a third party without its written consent.
However, SOHO bought the other 50 percent stake in Zendai for 4 billion yuan last year.
A lawyer for Fosun told the Shanghai No.1 Intermediate People's Court that SOHO and the other parties were "clearly attempting to bypass contract terms" by secretly buying the companies. "By law the affiliates cannot sell their stake to another party without our consent," he said.
SOHO's lawyers argued that the purchase of the companies was a normal and legal business activity. SOHO acquired the stake because the other parties were in financial trouble and had been unable to come to a deal with Fosun.
A lawyer for the defendants told the court: "We were struggling between life and death but what Fosun intended was to make a profit."
At the end of the three-hour hearing, Fosun's lawyers said the company is willing to buy back the stake from SOHO at the same price SOHO paid, while the defendants' lawyers said they are willing to seek mediation.
The court did not announce a decision yesterday.
Fosun Group, headed by billionaire Guo Guangchang, is suing SOHO China, a major commercial real estate developer, and other parties for breaching Fosun's rights to acquire a major stake of the Bund plot.
Shanghai Zendai Property Ltd bought the land in 2010 for 9.22 billion yuan (US$1.5 billion), the most expensive plot on the Bund at that time.
Fosun then bought a 50 percent stake, with the balance shared by affiliates of Zendai and another property developer Greentown China Holdings.
They are the other parties referred to in the lawsuit.
Fosen says it has a contract that stipulates the other parties cannot sell their holdings to a third party without its written consent.
However, SOHO bought the other 50 percent stake in Zendai for 4 billion yuan last year.
A lawyer for Fosun told the Shanghai No.1 Intermediate People's Court that SOHO and the other parties were "clearly attempting to bypass contract terms" by secretly buying the companies. "By law the affiliates cannot sell their stake to another party without our consent," he said.
SOHO's lawyers argued that the purchase of the companies was a normal and legal business activity. SOHO acquired the stake because the other parties were in financial trouble and had been unable to come to a deal with Fosun.
A lawyer for the defendants told the court: "We were struggling between life and death but what Fosun intended was to make a profit."
At the end of the three-hour hearing, Fosun's lawyers said the company is willing to buy back the stake from SOHO at the same price SOHO paid, while the defendants' lawyers said they are willing to seek mediation.
The court did not announce a decision yesterday.
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