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HONG KONG (Reuters) - Elliott Management Corp has raised its stake in Bank of East Asia Ltd (BEA) (0023.HK) less than two weeks before the Hong Kong lender defends itself in court against a lawsuit brought by the U.S. hedge fund.
Elliott bought 237,800 shares of BEA at an average price of HK$32.569 each, increasing its stake in BEA to 8 percent, according to a July 4 filing to the Hong Kong stock exchange.
Elliott's stake was last publicly disclosed in December 2015, when it crossed the 7 percent mark. Under Hong Kong regulations investors only have to disclose stakes when they move through a whole percentage level.
Elliott filed a lawsuit in Hong Kong in July last year against BEA, the majority of the bank's directors and its CEO and chairman over a share placement the lender made to Japan's Sumitomo Mitsui Banking Corp (SMBC).
The lawsuit is the latest in a long-running and escalating dispute between the New York-based hedge fund and the tycoon-owned Hong Kong bank.
"As a long-term shareholder, we continue to believe that there is the potential for significant shareholder value to be unlocked at BEA, when there are fundamental and substantial improvements to corporate governance and the overall management of the bank," an Elliott spokesman said.
BEA declined to comment on the increase in Elliott's stake.
BEA has said previously it will vigorously oppose Elliott's lawsuit, saying it went against the interests of the bank and its shareholders.
The dispute pits the $33 billion (25.50 billion pounds) fund founded by billionaire Paul Singer against BEA's flashy chairman and former politician David Li, whose grandfather founded the bank nearly 100 years ago and whose family is among the city's best connected.
The two sides met in the Court of First Instance of Hong Kong's High Court in April and are due to return on July 17.
(This version of the story corrects Elliott fund size to $33 billion from $27 billion in paragraph nine)
Reporting by Elzio Barreto; editing by David Clarke