HONG KONG, Jan 28 (Reuters) - Shares in China's largest van maker Brilliance China Automotive Holdings slumped 6.38 percent to HK$1.76 on resuming trade on Tuesday as confidence in the stock was shaken by a legal challenge.
The stock had been suspended since Friday pending a company announcement on the impact of a Bermuda court order initiated by Broadsino Finance Co Ltd, which is owned by former Brilliance chairman Yang Rong.
Brilliance said on Tuesday that the allegations in a writ filed by its ex-chairman were without merit but that did not reassure investors.
Broadsino obtained the order earlier this month in a bid to halt the sale of a 39.45 percent stake in Brilliance by the Chinese Financial Education Development Foundation to a firm controlled by China's Liaoning provincial government.
"The basic allegation in the writ is that the foundation's interest in the sale shares is held on trust for Broadsino," Brilliance said in a statement.
The court order restrains Brilliance from registering the transfer of the sale shares and any further dealing in such shares.
Brilliance said the foundation and the management directors, who have been named as defendants in the writ, have not been formally served with the writ or the court order. Therefore, the court order does not require them to take or refrain from taking any action.
A company spokeswoman said Brilliance had already sold the stake to the Liaoning provincial government's Huachen Automotive Group Holdings Co Ltd for HK$144.6 million (US$18.5 million) in December.
Huachen and the management directors also made an offer, as required by exchange rules, to buy Brilliance shares at HK$0.10 to existing shareholders.
The offer will proceed in accordance with the terms and conditions contained in the offer document, which was dispatched on January 9, the company said.
(US$=HK$7.8=8.28 yuan)