Troubled China-focused private equity fund London Asia Capital has accused Wuhan industrial tycoon Chen Yilong, the majority owner of its biggest portfolio company, of being the driving force behind a plan to oust its board.
London Asia's shareholders will vote at a meeting today on a request by Richpoint, a little-known Singapore-based fund, to topple four of its five directors.
The UK fund was one of Britain's most prolific investors in early-stage mainland companies in the first half of the last decade but became embroiled in accounting scandals and lawsuits.
In a letter to its shareholders, London Asia has claimed Richpoint is controlled by Chen. The letter alleges the Wuhan businessman and National People's Congress deputy is using the Singapore fund as a vehicle to seize control of the board. Chen's plan, London Asia says, is then to buy London Asia's stake in the business he controls, named Zhongying, at a knockdown price.
Chen did not respond to phone calls and e-mails requesting comment. But Guangwen Sha, London Asia's fifth director and Richpoint's representative on the UK fund's board, said all of London Asia's claims were untrue.
The UK fund's biggest holding is its 20 per cent stake in Zhongying, which holds a hodgepodge of mainland assets, including 55 per cent of a property company and 5 per cent of a Fujian chicken farm. London Asia values its Zhongying holding at GBP32 million (HK$396.31 million).
