(Yicai Global) June 15 -- After failing to acquire a stake in Panasonic Appliances Microwave Oven Shanghai, home appliance giant Galanz Group has reported the seller to the Shanghai bourse, claiming that the joint venture’s Chinese shareholder had rejected the deal for improper reasons.

Inesa Intelligent Tech unjustifiably rejected Galanz’s qualification to take part in the bidding for a stake in the JV, which may have led to Japanese white goods titan Panasonic acquiring the equity at a low price without any competition, according to a June 13 complaint released by the Foshan-based firm.

Shanghai Yangtze River Investment and Development, a unit of Inesa, is the Chinese shareholder of Panasonic Microwave Oven, with a 40 percent stake. It put its stake up for sale on the Shanghai United Assets and Equity Exchange in April, with the potential buyers being Galanz and Panasonic Appliances China. The latter owns the other 60 percent of the JV.

Shanghai Yangtze River Investment and Development rejected Galanz’s application to bid on the grounds that it was engaged in a business similar to that of the JV and did not meet the condition of restricting intra-industry competition. But Galanz argued that the Chinese shareholder did not disclose this restriction during the share listing process, so this reason was not justified, Yicai Global learned from Galanz.

Inesa will issue an announcement about the dispute through the Shanghai Stock Exchange as soon as possible, Cao Shihai, the firm’s director of investment planning, told Yicai Global today.

Galanz is China’s second-largest microwave oven maker after Midea Group, with the two companies together accounting for more than 80 percent of the market. Galanz’s attempt to acquire a stake in Panasonic Microwave Oven is primarily aimed at strengthening its position in the export market, industry insiders noted.

Founded in 1994, Panasonic Microwave Oven posted revenue of nearly CNY2 billion (USD278.7 million) last year. Its products are mainly sold in overseas markets, including the Americas, Europe, and Japan, with its sales in the Chinese market accounting for less than 20 percent.

Editors: Dou Shicong, Peter Thomas