Bank of America
has shelved a $3 billion sale of shares of
China Construction Bank
following objections from Beijing, the
The bank, which in 2005 was part of a wave of foreign investment into Chinese banks, last week hired
to help sell a chunk of Hong Kong-listed shares to reduce its overall holding in CCB to less than 17%, according to the newspaper.
reports Bank of America's sale of shares in CCB was undone by a securities law provision that would have forced it to forfeit profits from the sale.
Bank of America, which raised its stake in CCB in June and November, earlier this week halted the sale of as many as 5.5 billion shares in the Chinese bank after discussions with lawyers,
reports, citing a person familiar with the matter.
, China's securities law bans investors holding more than 5% of a locally incorporated, publicly traded company from selling shares within six months of buying the stock. Shareholders who fail to observe the rule may be forced to hand over any profits from a sale to the company whose stock they sold.
This article was written by a staff member of TheStreet.com.