Independent shareholders in CNOOC Ltd narrowly defeated a proposal that would have allowed the Hong Kong and US-listed company to deposit hundreds of millions of dollars with CNOOC Finance, an arm of its state-owned parent. The voting down of the proposal on Friday could put other listed Chinese firms under pressure to distance themselves from their state-owned parents, the Wall Street Journal reported. The Hong Kong Stock Exchange forbids related transactions such as deposits unless the moves receive investor approval. CNOOC, which is controlled by China National Offshore Oil Corp, received this approval in 2004 and was seeking to renew it. Shareholder advocates claim that these deposits – effectively a loan from the listed entity to unlisted affiliates – expose investors to undisclosed risks. CNOOC CEO Fu Chengyu said the board respected the independent shareholders' decision but remained convinced that the arrangement with CNOOC Finance would have been beneficial to the company as a whole.
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