China’s Fosun faces lawsuit over stake sale in Nanjing Nangang to Jiangsu Shagang

FOSUN International said on Friday (Apr 21) steel manufacturer Jiangsu Shagang Group has filed a lawsuit against the company alleging the failure of one of Fosun’s unit to perform an obligation under a recent deal.

Last month, Fosun said it would sell its 60 per cent stake in Nanjing Nangang Iron & Steel United to Jiangsu Shagang for 13.58 billion yuan (S$2.6 billion).

Jiangsu Shagang alleged that Fosun Industrial Investment failed to pledge its 11 per cent stake in Nanjing Nangang.

The Chinese conglomerate said the litigation will not affect the group’s operations and it will take appropriate action to defend the claims.

In recent times, Fosun and its units have cut stakes in firms such as New China Life Insurance, Zhaojin Mining Industry Co and Shanghai Yuyuan Tourist Mart Group. Earlier this year, the company sold its stake in four separate firms for a combined 6.7 billion yuan. REUTERS