Minority shareholders of Chinese online company Autohome have filed a petition in court relating to Telstra's attempt to sell 47.7 percent of total shares to Chinese insurer Ping An Insurance Group for AU$2.1 billion.
"A petition has been filed in the Cayman Island courts by certain minority shareholders of Autohome relating to the sale of Autohome shares by Telstra to Ping An," Australia's incumbent telecommunications provider said in a market update to the Australian Securities Exchange (ASX).
"Telstra intends to contest the petition."
Announced last month, the sale was proposed for a price of $29.55 per share, with Telstra to retain a 6.5 percent stake in Autohome.
The sale has yet to be approved by Chinese regulators as well as the Autohome board, with Autohome chief executive James Qin also making a bid along with private equity firms Sequoia China and Boyu Capital and investment firm Hillhouse Capital to buy out Telstra's stake for $31.50 per share.
Once completed, Telstra is expecting to record an accounting gain of around AU$1.8 billion, subject to adjustments. Earlier this month, Telstra CEO Andrew Penn announced that the Autohome shares sale would fund a capital management program of AU$1.5 billion for the second half of calendar 2016.
The definitive monetary amount, timing of delivery, and nature of the return of capital to shareholders is yet to be determined by the company, and is conditional on regulatory approvals, Penn said during Telstra's Investor Day 2016 presentation.
"I am pleased that we are able to confirm such a significant capital management program as the result of active management of our investment portfolio. Given our recent announcement of the sale of Autohome shares, we believed it was important to provide the market with further information about how we intend to use those funds," Penn said.
"While specific details of the nature of the capital management program are yet to be confirmed, creating this type of shareholder value is in accordance with our capital management framework. Importantly, we also maintain sufficient capacity to invest in our growth plans for the future."
Telstra said it would announce more details during its full-year results presentation on August 11.
Telstra has owned shares in Autohome since 2008.