Shandong-based retailer Sanlian Group has sued several companies, including the Chinese electronics retail giant Gome, for the illegal acquisition of 27 million shares in Sanlian Group's Sanlian Commerce subsidiary and has asked the court to announce the purchase as invalid, as well as seeking CNY50 million compensation from these companies.
The case has been accepted by the Shandong Supreme People's Court and will be heard on February 18, 2009.
On January 7, 2008, China's CITIC Bank Jinan branch applied to sell the 27 million stakes in Sanlian Commerce owned by Sanlian Group by auction to pay for Sanlian Group's CNY39 million in outstanding bank loans. On February 14, 2008, the Intermediate People's Court of Jinan designated Shandong Qilu Ruifeng Auction Company to be in charge of the open auction. The 27 million shares, which accounted for 10.69% of the total stake of Sanlian Commerce, was subsequently acquired by Shandong Longjidao Construction Company for CNY541 million. On February 20, 2008, Sanlian Commerce received an ownership transfer decision from the Intermediate People's Court of Jinan, according to which, Longjidao become the largest shareholder of Sanlian Commerce.
Before long, the Chinese electronics retailer Gome formally acquired Longjidao and indirectly held Sanlian Commerce.
Sanlian Group says the auction was not properly handled. Therefore, the company has sued all relevant companies, including Gome Electrical Appliance, Gome Jinan branch, Longjidao, Shandong Yongdao Investment Company, CITIC Bank Jinan branch and Shandong Qilu Ruifeng Auction Company at the Shandong Supreme People's Court, asking the court to decide the auction is invalid and extract CNY50 million in compensation from the defendants. In addition, Sanlian Group says it maintains a right to seek further compensation.