LONDON (Alliance News) - Cathay International Holdings Ltd Monday said a subsidiary of its majority-owned Lansen Pharmaceutical Holdings Ltd faces legal proceedings.
The claimant in question is seeking damages of about CNY70 million, plus legal fees, from Ningbo Liwah Pharmaceutical Co, a wholly owned subsidiary of Lansen Pharmaceutical Holdings Ltd, a company in which Cathay owns a 50.56% stake.
Neptunus Medicine Co Ltd, a subsidiary of Shenzhen Neptunus Biological Engineering Co Ltd, has initiated legal proceedings as plaintiff against Ningbo Liwah Pharmaceutical.
According to Lansen, Neptunus Medicine had submitted a writ of summons at Shenzhen Intermediate People's Court and the court had issued a notice of case acceptance.
Ningbo Liwah has not received any court documents in relation to the litigation, Lansen said, adding that the claimant has alleged that "it had suffered several losses due to the use of ginkgo extract supplied by Ningbo Liwah".
Ginkgo extract is used in the claimant's products. Ginkgo is a herb.
"Lansen has sought a preliminary opinion on the litigation from its legal counsel in the People's Republic of China, who, based on the information available as of the date of this announcement, is of the opinion that the amount claimed by the Claimant is highly disputable," the company's statement said.
"Lansen will, in accordance with the applicable laws, make every effort to protect its interests and its shareholders' interests, actively respond to the case and defend its position vigorously. Lansen will closely monitor the development of this matter and make further announcements if and when there are any significant developments in relation to it," the statement said.
Cathay International shares were down 2.8% at 26.00 pence on Monday morning in London.
By Samuel Agini; samagini@alliancenews.com; @samuelagini
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