A landmark QFII case: Nanning Sugar vs Martin Currie
March 17, 2009 | BY
clpstaff &clp articlesHubert TseYuan Tai PRC [email protected] June 2008, Nanning Sugar Manufacturing Co, whose shares are listed on the Shenzhen Stock Exchange,…
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Hubert Tse
Yuan Tai PRC Attorneys
In June 2008, Nanning Sugar Manufacturing Co, whose shares are listed on the Shenzhen Stock Exchange, filed a lawsuit against Martin Currie Investment Management Ltd (MCIM) with the Nanning Intermediate People's Court claiming that MCIM had violated Chinese securities law by selling Nanning Sugar shares within six months of purchase.
Nanning Sugar claimed MCIM and Martin Currie Inc (MCI) bought 16.9 million shares – a 5.9% percent stake in the company – in August 2007, and then sold 14.5 million shares (5.07%) in January 2008. Nanning Sugar claimed that under PRC securities law any earnings from sales of its shares exceeding 5% of the company's total equity within six months belong to the company. The profit was Rmb10 million (US$1.46 million) in this case.
MCIM is one of 76 foreign institutions that have secured Chinese government approval to invest a total of US$30 billion in Chinese stocks and