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LONDON - BANK of America has shelved a US$3 billion (S$4.32 billion) sale of China Construction Bank stock following objections from Beijing, the Financial Times reported on Friday.
The business daily said the bank last week began moves to sell a chunk of its shares to reduce its overall holding in CCB to below 17 per cent.
But BofA chief executive Ken Lewis scrapped the plans after a phone call with CCB counterpart Guo Shuqing, the FT said, citing people familiar with the situation. It said dealmakers believe 'Beijing was unhappy about the timing'.
BofA's stake in CCB rose to 19.1 per cent after it exercised an option last month to nearly double its stake, but had been widely expected to sell part of the shares it acquired.
The latest move is likely to fuel fears that overseas investors struggling under the global financial crisis will have difficulty offloading lucrative holdings in China's banks, the paper said.
'BofA cancelling those trades has made the other foreigners realise they don't exit at their discretion, but that of the Chinese government,' it quoted one Asian dealmaker as saying.
CCB told the newspaper: 'Our cooperation (with BofA) is long-term. Whatever price or time BofA raises or reduces its holding is up to the market.' -- AFP
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