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SOHO appeals to overturn court ruling
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SOHO China appealed at the Shanghai Higher People’s Court yesterday as it sought to overturn a previous ruling that invalidated its purchase of a major stake in a prime plot on the Bund from two property developers.
The higher court didn’t return a verdict yesterday. A mediation request from the appellant SOHO was turned down by the respondent as well as the plaintiff of the previous trial, Fosun Group.
In April, the Shanghai No. 1 Intermediate People’s Court ruled that SOHO’s purchase of the Bund plot was invalid. The intermediate court ordered the ownership structure of the plot to revert to its original status within 15 days after the first ruling.
SOHO bought a 50 percent stake in the parcel for 4 billion yuan (US$651 million) in late 2011. The dispute centered on whether Fosun’s previous partners Zendai and Greentown could sell their shares to SOHO without Fosun’s consent. Fosun argued it’s entitled to a preemptive right to buy the remaining half of the project.
Zendai bought the plot in February 2010 for 9.22 billion yuan. A joint venture was formed by Zendai, Fosun and Greentown to co-develop the project.
But Zendai and Greentown faced liquidity problems a year later as the Chinese government began to rein in surging housing prices. The two firms were approached by several buyers who were keen in the plot and sold their shares in the JV to SOHO eventually.
Zendai and Greentown contended that Fosun showed no interest in acquiring the stake when SOHO made a bid for 4 billion yuan.
Fosun argued the sellers asked for 4.25 billion yuan in their first offer and rushed to close the deal with SOHO without Fosun’s consent.
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