Shenzhen Investment Ltd. indirect subsidiary Wuhan Shum Yip Terra Property Development Co. Ltd. is appealing a Chinese court's decision, which found it guilty of bribery.
The appeal was filed Oct. 9 on the back of the Sept. 28 release of The People's Procuratorate of Jianli County of Hubei Province's first-instance judgment, ruling that the subsidiary, along with three former executives, violated certain regulations during its acquisition of a state-owned land parcel for the Terra-Nanhu Rose Bay Project.
As a result of the findings, bank accounts of Wuhan Shum Yip containing nearly 549.2 million yuan, as at June 30, have been frozen. The subsidiary was also ordered to pay about 557.4 million yuan, and the three executives have been sentenced to 1.5 years in prison.
The land parcels at the center of the litigation were won by the company at a public bidding conducted August 2005. Prosecutors claimed that Wuhan Shum Yip's violations led to a loss of income for the state.
In a filing, Shenzhen Investment assured shareholders that the outcome of the ongoing court proceeding will not have any material adverse effect on the group's assets, financial standing and operations.
As of Oct. 9, US$1 was equivalent to 6.63 Chinese yuan.