China Merchants Bank Co. Ltd. has filed a lawsuit against a subsidiary of brokerage Everbright Securities Co. Ltd. for failing to compensate the bank on the brokerage's investment in a now-bankrupt British media company, Caixin reported June 3.

China Merchants Bank is seeking 3.5 billion yuan from Everbright Capital Corp. as compensation for Everbright Capital's failed investment in British sports media company MP & Silva Holding SA, the news outlet said, citing a filing in Chinese to the Shanghai Stock Exchange.

The bank invested 3.2 billion yuan in an investment vehicle that Everbright Capital set up to acquire 65% of MP & Silva. The bank and Everbright Capital agreed that the latter would pay it 3.5 billion yuan in compensation if the senior partners could not "exit the investment."

The British sports media company ran into problems after the acquisition was completed in May 2016 and was declared bankrupt in October 2018. After the bankruptcy, Everbright Securities wrote off 1.52 billion yuan in impairment losses for 2018.

The bankruptcy has led to several other lawsuits among partners in the deal. Shanghai HuaRui Bank Co. Ltd., which invested 3.2 billion yuan in the deal, has filed two pending cases against Everbright Capital demanding a payment of 883.73 million yuan. Everbright Capital has filed its own lawsuit against Baofeng Group, a junior partner in the investment vehicle, demanding 751.19 million yuan in compensation.

As of June 3, US$1 was equivalent to 6.90 Chinese yuan.