Top Biz News

Minsheng puts off quest for foreign partners

(China Daily)
Updated: 2006-08-03 11:08

"Liu Yonghao still hopes to remain the largest shareholder in Minsheng Bank, although Temasek may increase its stake through the share sale to become number two or number three," said the insider.

The Singaporean Government's investment vehicle Temasek is currently Minsheng's seventh-largest shareholder.

The private placement would boost Minsheng's capital adequacy ratio to about 10 per cent from about 8.3 per cent currently, slightly above the minimum regulatory requirement of 8 per cent, the sources said.

"In that case, Minsheng won't feel too anxious any more to secure a new foreign partner for capital. It is also unlikely that Chinese regulators would allow Minsheng to issue more shares to a new foreign partner so soon this year," said another Beijing-based banking source.

Liu, 55, chairman of the country's biggest agricultural conglomerate New Hope Group, holds a combined stake of nearly 9 per cent in Minsheng Bank with his daughter through units of his New Hope Group.

Liu, former vice-chairman of Minsheng Bank, did not keep his position in a management reshuffle last month, though New Hope still has a representative on the board.

"Liu has decided to firm up his power in the bank by increasing his stake," said another Chinese banker close to Liu.

Liu expects to increase its stake to around 10 per cent of Minsheng through an investment arm of his New Hope in the share placement, while Temasek's stake is expected to be close to but still smaller than Liu's stake, the sources said.

Other investors in Minsheng include Orient Co, a major private industrial firm owned by Chinese businessman Zhang Hongwei, Minsheng's vice-chairman. Orient may compete with Temasek for the position of second or third biggest shareholder in Minsheng, the sources said.