China Resources boss denies misconduct

Song Lin, chairman of China Resources (Holdings) Co., Ltd.

China Resources (Holdings) Co. Ltd., chairman Song Lin has fended off accusations made against him regarding acquisition malpractice, marking his first personal reaction to the charges.

Song Lin said the accusations are false and the transaction in question can be considered normal commercial activity that is in accordance with the law and regulations on the Chinese mainland and the listing requirements in Hong Kong, according to a statement posted on China Resources' website on Wednesday. Song said he would reserve the right to pursue legal action over such slanderous claims.

China Resources (Holdings) is a state-owned conglomerate registered in Hong Kong. The allegation arose in mid-July, when Wang Wenzhi, a journalist at the Economic Information Daily, accused Song of intentionally overpaying for three coal mines and other assets that China Resources Power (CRP), the Hong Kong-listed subsidiary of China Resources, bought in 2010 in north China's Shanxi Province. Wang believed the transaction led to the loss of billions of yuan in state-owned assets.

China's state-owned asset watchdog said several days later that punishments will be imposed if ongoing auditing uncovers any illegal practices at China Resources (Holdings).

On Monday, Li Jianjun, a former mainland journalist and the alleged whistleblower of Song's case, lodged complaints with the Independent Commission Against Corruption and commercial crime investigators in Hong Kong.

A hearing has also begun in Hong Kong's High Court in a lawsuit brought by six CRP minority shareholders. They allege that 20 former and current CRP directors failed in their duty to protect the interests of shareholders by causing CRP to buy two coal mines without valid exploration rights and failing to cancel the deal and recover money from the seller.