(Yicai Global) July 14 -- Internal strife among shareholders of Sichuan State Lithium Materials Co., the core lithium asset platform backed by detonation equipment seller Sichuan Yahua Industrial Group Co. [SHE:002497], caused Yahua Group's stock price to drop.

A raft of shareholders from Sichuan State Lithium, including Chengdu Yashang Fuyi Investment Co., gave carte blanche to Chen Siwei to take over all areas of the company's production and operation management, dismissing Gao Xin, the chairman and legal representative of Sichuan State Lithium who was dispatched by Yahua Group.

Some 11 stockholders sent a notice to Yahua Group, condemning it for damaging the rights and interests of stakeholders by allowing Sichuan State Lithium's production and operation to remain in poor condition for an extended period.

Yahua Group bought into Sichuan State Lithium, purchasing 37.25 percent of its equity in 2013, but runs the risk of losing its status as the firm's largest shareholder.

Yahua Group will not give up its controlling stake in Sichuan State Lithium as it is bullish on the lithium industry, said Zhai Xiongying, secretary of the board of Yahua Group. Although Sichuan State Lithium's performance has not been affected by recent events, its shareholders will likely seek external intervention, Zhai said.

Sichuan State Lithium had USD84 million (CNY573.65 million) worth of assets at the end of last year, and CNY450.88 million in net assets, Yahua Group said yesterday. The lithium enterprise's operational revenue was CNY189.29 million last year, and its net profit was CNY28.95 million.

Yahua Group raked in an aggregate net profit of CNY147.72 million last year, 7.3 percent of which came from Sichuan State Lithium, whose confirmed profit from investments was CNY10.78 million.

The price of Yahua Group shares was down 8.78 percent as of closing yesterday.