Queensland Investment Corp files compensation claim against CLP Holdings for HK$5.6b

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CLP Holdings, the larger of Hong Kong’s two monopoly electricity suppliers, says its Australian unit will defend itself against a compensation claim by the Queensland state government. Photo: Sam Tsang

Eric Ng

Published: 4:45pm, 19 May 2017Updated: 10:58pm, 19 May 2017

Queensland Investment Corp has initiated legal proceedings against Energy Australia, the Australian unit of CLP Holdings, seeking HK$5.6 billion in compensation for what it says was incomplete or misleading disclosures in a HK$10 billion asset sale.

The claims pertain to “certain representations” made under the relevant asset disposal agreements related to the “technical performance” of the Iona natural gas processing and storage plant in Victoria state, CLP said in a filing to the Hong Kong stock exchange at the midday trading break on Friday.

CLP said its Australian units “intend to vigorously defend the claims”.

“On the basis of currently available information, the company’s view is that a material outflow of economic benefits from the CLP Group is unlikely,” CLP said in the filing.

Lochad Energy, Iona’s buyer, claimed that CLP’s Australia subsidiaries Energy Australia and Energy Australia Investments “deliberately or recklessly” failed to inform bidders during the sale of the plant about significant capacity constraints that would have a major impact on offer prices, the Australia Financial Review reported, citing documents lodged in the Supreme Court of Victoria on Friday.

CLP’s shares ended Friday’s session 1.4 per cent lower at HK$82.95, compared to a 0.2 per cent rise of the Hang Seng Index.