Nanjing Sugar sues Martin Currie over trading dispute

By Wang Yanlin  |   2008-6-16  |     ONLINE EDITION

THE United Kingdom-based firm Martin Currie Ltd and its two wholly-owned subsidiaries were brought to court by Nanning Sugar Manufacturing Co Ltd because of a share-trading dispute, a statement filed to the Shenzhen Stock Exchange said today.

The suit was China's first court case involving a qualified foreign institutional investor under the QFII scheme.

According to the statement, Martin Currie Investment Management Ltd and Martin Currie Inc, the two subsidiaries, bought 16.92 million shares, equivalent to 5.9 percent, of Nanning Sugar between August 23 and 30.

From January 4 to 25, the two subsidiaries sold 14.53 million shares, or 5.07 percent of the total, and put the gains into their own pockets -- which allegedly violates China's securities laws.

Under securities laws, any earnings from the sale of a company's shares exceeding 5 percent of its total equity within six months belonged to the company -- in this case, the gains should be delivered to Nanning Sugar.

A court in Guangxi Zhuang Autonomous Region has agreed to hear the lawsuit and has asked that the defendants' local bank deposits of about 39.6 million yuan (US$5.7 million) be frozen.

Martin Currie was among 54 overseas institutions that have received Chinese government approval to invest in mainland stocks and bonds under the QFII scheme.

Martin Currie was not available for comment today.