SDB share reform plan rejected
19 July 2006
Shenzhen Development Bank shareholders rejected a plan to reform the company's non-tradable shares. Holders of just 39% of the bank's tradable shares voted for its plan, 37% opposed it and 24% abstained. Firms' plans must be approved by more than 66% of holders of tradable shares, who usually receive compensation in the form of cash, new shares or both for the dilutive effect of the reforms. The result will delay a deal to sell a 7% stake in the bank to General Electric for US$100 million, but Frank Newman, the bank's chairman, told the Wall Street Journal the transaction wasn�t in jeopardy. The sale would make GE its second-largest shareholder behind US private equity firm Newbridge Capital, which bought a 17.89% stake in May 2004, before the launch of the non-tradable share reform program in April last year.
