(Adds Bank of East Asia comment)
HONG KONG, Feb 4 (Reuters) - The board of Bank of East Asia Ltd should sell the lender to deliver better returns to investors, activist shareholder hedge fund Elliott Management Corp said on Thursday, heaping pressure on one of Hong Kong's last family-controlled banks.
New York-based Elliott owns 7 percent of the bank and has agitated in the past over perceived failings in management by the founding Li family, saying in February last year that a planned capital raising was contrary to shareholders' interests.
In a letter to fellow shareholders published on Thursday, Elliott said the bank's executives had serially mismanaged the business, leading to weak performance and poor returns for minority shareholders.
Shareholders of the bank, which include Spain's CaixaBank, should urge the board to auction the lender for around HK$60 ($7.71) a share, Elliott said, 175 percent more than the current price of HK$21.80.
Elliott's actions demonstrate self-interest rather than the best interests of all shareholders, Bank of East Asia told Reuters in an emailed statement, calling the letter "fundamentally inconsistent".
The fund's plans are focused on winning short-term gains, giving no thought to Bank of East Asia's long-term business, the lender said, adding Elliott had been building its stake for a few months to push the bank into play.
$1 = 7.7853 Hong Kong dollars Reporting by Lawrence White; Additional reporting by Richa Naidu; Editing by Himani Sarkar and Mark Potter