News of a large sell-down by a major shareholder was, for once, not greeted by markets with alarm, when tainted vegetables group Chaoda Modern Agriculture sold most of its shares in Asian Citrus.

Chaoda Modern said it had agreed to sell 100m shares in Asian Citrus, China's biggest orange growers, equivalent to an 8.2% stake, at HK$4.66 apiece.

However, the sale of a stake worth HK$466m ($59.8m), rather than provoking fear among investors helped Asian Citrus shares, prompted a 2.4% rise to HK4.72 in the group's Hong Kong-listed stock.

The London shares stood 0.7% higher at 38.7p in morning trade.

Chaoda Modern is one of the series of Chinese groups surrounded by fraud allegations, whose associations with Asian Citrus at a shareholding and business level, as a provider of fertilizer, have placed the fruit group in the spotlight too.

Asian Citrus shares on September 30 – when Chaoda Modern announced it would be delaying publication of its annual report, following the suspensions of trading in its shares - fell to a two-year low of 24.08p in London.

Board question

The disposal is the latest in a series by Chaoda Modern which, when Asian Citrus listed four years ago, owned 39% of the group.

Chaoda is left with a stake of 5.4%, assuming the placement was successful, demoting it to third in the list of leading Asian Citrus shareholders, fractionally ahead of Temasek, the Singaporean state investment fund.

However, it is unclear whether the sale will prompt Chaoda's director on the Asian Citrus board, Ip Chi Ming, to step down.

"Chaoda are still a fairly substantial shareholder, and it might make sense for them still to have someone on the board," a person familiar with the group told Agrimoney.com.

The identity of the buyer, or buyers, of the shares Chaoda disposed of has yet to be revealed.