New board takes control of Shandong Shanshui after prolonged battle

Tianrui took control of China Shanshui's board on Dec 3, 2015, continuing the power struggle after a series of complicated corporate and legal proceedings. The control of Shandong Shanshui headquarters was an extension of the fight between Tianrui and the Zhangs.

"Except for the seals from Shandong Shanshui, all other chops and licenses retained by the former directors of Shandong Shanshui have been found and returned to each of its subsidiaries. The company is taking stock of the books, other important documents and fixed assets of Shandong Shanshui in its headquarters," China Shanshui said in Monday's statement.

Repeated defaults

The fierce boardroom battle has taken a huge toll on Shandong Shanshui. It employs over 20,000 employees across various provinces and has an annual cement production capacity of more than 100 million tonnes.

Shandong Shanshui declared default on a 2 billion yuan ($305 million) debt in November 2015 and another 1.8 billion yuan debt in January 2016.

Following the November default, many cement, coal and steel companies, all in industries which are experiencing huge overcapacity, canceled their debt offerings, with investors jittered about the risk.

"Shanshui's finances were comparatively sound, so its unexpected default had an impact on investors," Sun Binbin, a researcher with China Merchants Securities, said at the time of the default announcement.

In both defaults, the company said it had been seeking financing options, but was turned away from banks and financial institutions because there were concerns over the management of the company and the impact that it may have on the business and financial prospects.