Global markets fall causes China's Sino Biopharmaceutical to ax Cinda deal

A $774 million deal Hong Kong-listed Sino Biopharmaceutical planned to make buying a stake in a Chinese asset management company was axed as markets around the world fell since the start of the year, especially in China. The deal was panned by investors from the start. They questioned the need for a pharmaceutical company to buy a stake in a bad-asset manager that took on nonperforming assets held by mainland banks. Sino's own shares fell 20% in January when it announced the deal and investors said then the acquisition "defied logic." Bloomberg reported this week that Sino still held a "positive view" on the value of the investment and would pay a $1.28 million termination fee. Sino said when it announced the deal that it would provide a "reasonable investment opportunity" for the company and would help generate "attractive returns" for shareholders, according to Bloomberg. Sino was also taken to task for not explaining the deal in detail. The company has also raised red flags with its corporate governance practices, including problems at subsidiaries accused of bribing doctors and the appointment of the 22-year-old daughter of the former chairman to replace him. Report