(Yicai Global) June 1 -- Nanjing Iron and Steel Group has joined the lawsuit Jiangsu Shagang Group filed against Fosun International over the contested sale of a stake in Nanjing Iron and Steel United.

The Jiangsu Provincial High People’s Court gave Nanjing Iron and Steel Group the possibility to participate in the lawsuit as a third party with independent claims on May 30, Nanjing Iron and Steel, the listed arm of Nanjing Iron and Steel United, said yesterday evening.

Last October, Shanghai-based Fosun announced that it intended to sell 60 percent of Nanjing Iron and Steel United to Shagang for as much as CNY16 billion (USD2.3 billion). In March this year, the two parties formally signed the transfer agreement, replacing the investment framework deal signed in October, and decided on a price of CNY13.6 billion.

On April 2, Nanjing Iron and Steel Group, which owns 40 percent of Nanjing Iron and Steel United, announced its decision to exercise its pre-emptive rights, after it received an injection of CNY13.6 billion from Citic Pacific Special Steel Group, the world’s largest specialist steelmaker. This terminated the equity transfer agreement between Fosun and Shagang.

Fosun said that it had fully refunded the CNY8.3 billion (USD1.2 billion) principal and interest to Shagang on April 4 and that the framework deal had expired. But Shagang released a statement on April 21, claiming that Fosun had failed to honor the framework agreement, and so it filed suit against Fosun.

Yicai Global learned that Nanjing Iron and Steel Group’s exercise of pre-emptive rights is subject to review by national antitrust regulators, so there are still uncertainties about the deal.

Editor: Futura Costaglione