Shareholders challenge merger involving Chinese energy company

Three shareholder lawsuits were filed in Las Vegas this week challenging a merger involving a Chinese corporation that has publicly traded stock in the United States.

Sinoenergy Corp. of Beijing owns compressed natural gas (CNG) filling stations in China and makes CNG transport truck trailers, CNG filling station equipment and CNG fuel conversion kits for vehicles.

The company, with stock traded on the Nasdaq stock exchange, is incorporated in Nevada.

On Oct. 12, the company announced an agreement to be acquired for $30.3 million, or $1.90 per share, by Skywide Capital Management Ltd. The $1.90 represented a 48 percent premium compared to the price of the stock before the announcement.

Skywide is Sinoenergy's largest shareholder and is owned by Sinoenergy's chairman and its president.

Separate lawsuits challenging the deal were filed Monday in Clark County District Court by three shareholders.

Law firms involved in filing the complaints were Cooksey, Toolen, Gage, Duffy & Woog in Las Vegas; Rigrodsky & Long in Wilmington, Del.; Stull, Stull & Brody in New York; and Weiss & Lurie in New York.

The plaintiffs claim Sinoenergy directors breached their fiduciary duties by failing to arrange a deal at the highest possible price for public shareholders and engineered the takeover to benefit themselves and Skywide to the detriment of Sinoenergy public shareholders.

The merger price is "unfair and grossly inadequate because ... the intrinsic value of Sinoenergy is materially in excess of the amount offered in the proposed transaction, giving due consideration to the company's anticipated operating results, net asset value, cash flow profitability and established markets," charges a suit filed by shareholder Johan Stoltz seeking class-action status and an order blocking the proposed transaction.

Sinoenergy has not yet responded to the allegations and efforts to contact the company for comment Wednesday were unsuccessful.