Pity the investor in China Continental, a holding company that makes bulletproof vests, owns a biotech farm in Inner Mongolia, sources manufacturing equipment for government enterprises and resells raw materials. Its shares have plunged 55% this year amid a management dispute that all but destroyed the company.

China Continental, formed in 1995, is listed on the US over-the-counter Bulletin board. On 18 July, in a statement to the stock exchange, the company said it had agreed to be acquired by Singapore investment company Transcontinental Capital Management (TCM). It said it planned to switch its business from manufacturing to oil, gas and transportation.

Under the plan TCM would inject $72 million worth of Indonesian oil and gas assets into China Continental and its managers would take over China Continental's board. China Continental would consolidate its stock, change its name to Harriman Global Resources and apply for a listing on Nasdaq. Chief executive Harry Ho would step down.

The proposal was never realized. At China Continental's 1 August general meeting, shareholders led by Shang Jia Ji, 47, a businessman who owns 30% of the company, voted against the plan. Instead, they installed Shang as chief executive and voted in favor of a new management team whose expertise lies in biotechnology and agriculture rather than oil and gas.

The decision follows months of internal wrangling during which the company all but fell apart. It abandoned attempts to run its core manufacturing business. Revenue in the second quarter of this year fell to zero from $10.7 million in the year-earlier period and it posted a loss of $304,000 compared to net profit of $5 million. Its shares were last trading at $0.21, down from a 52-week high in February of $2.04. The business of sourcing machinery and personnel for "turnkey" projects relied on the company's relationship with party members. The old board had those relationships. The new team doesn't.

Under Shang, the company will focus on developing its Dong Wu Bio Tech farm, a 406 square kilometre facility that uses genetic technology to breed livestock and improved varieties of forage grass. Last year the farm contributed nothing to the company's revenue. China Continental vice president Brian Ko says it expects to make about $3 million from sales of its forage grasses by the end of the year. It also hopes to breed 2,000 Boet goats from embryos imported from Australia and Canada. Boet goats have 70% meat to 30% bone and are more valuable than a typical Chinese goat, which has 30% meat to 70% bone. The company is still calculating how much it expects to make from the goats.

Damage control

It's also trying to assess the damage caused by its internal war.

"We are eager to resolve any problems and wrongdoings perpetuated by previous management," says Shang. "One of the more important purposes of putting in a new management team is to make China Continental more transparent and more responsible to shareholders."

It's got a long way to go. Most of this saga has taken place behind closed doors and investors looking for information will have to search hard. The company is incorporated in Utah in the US. Investors are referred to a representative in New York, while legal matters are handled by an attorney in Texas. The company's headquarters, until recently, were in Hong Kong. Now they are in Tianjin, just south of Beijing in mainland China. The company says it makes sense because it has laboratories in Beijing. It happens to be convenient for Shang too, who runs a construction and interior design company in Tianjin.

It is testament to the secrecy practiced by many Chinese companies that, as far as the new management can determine, there is no documented record of TCM's agreement with China Continental. Neither is it clear that the board was notified of the agreement before the statement announcing the deal was sent to the stock exchange on 18 July. Shang, who was on the board, says that was the first he heard of it. He says he doesn't know whether other board members were told. TCM declined to comment on the situation.

Meanwhile, Harry Ho, the company's former CEO, has disappeared, at least to anyone seeking information about his businesses. Staff at his former China Continental office in Hong Kong say the office is now the home of TCM, of which Ho, they say, is chief executive. Shang says he doesn't know whether Ho was running TCM at the same time as running China Continental. Brian Ko says the new board can't reach Ho. Staff who answer the phone at Ho's office say, variously, that he's traveling, out to lunch, on a business trip or just "not here". They say they have no idea how to reach him.