Bank of China shares fall after HK tycoon's sale

Bank of China shares tumbled Thursday after Hong Kong billionaire Li Ka-shing's foundation sold more than $500 million worth of shares in the lender, becoming the latest investor to cut its investment in China's banking sector.

Meanwhile, struggling investment firm Royal Bank of Scotland said it may also sell its own stake in the Chinese lender.

The Li Ka Shing Foundation sold 2 billion shares at 1.98 Hong Kong dollars each _ a 7.5 percent discount to Wednesday's closing price, according to a term sheet for the deal. The total amount raised in the sale, which closed Thursday, was $511 million.

Bank of China, the mainland's No. 3 lender, fell 8.4 percent to $1.96 on the Hong Kong stock exchange.

Li's sale shouldn't be interpreted as skepticism about the Bank of China's prospects, said a foundation spokesman. Li still controls 3 billion shares that he plans to hold for a "very long time."

"The foundation has many investment projects and Mr. Li buys and sells once in a while, so this is just a normal funds allocation," said the spokesman, who declined to be identified per policy.

The sale comes a day after Bank of America Corp., looking to raise money to cope with economic turmoil, sold a 2.5 percent stake in China Construction Bank for about $2.8 billion.

Last month, Swiss bank UBS AG said it sold its stake in Bank of China in a deal estimated to be worth around $900 million.

On Thursday, Royal Bank of Scotland said it may follow Li and UBS, but declined to give further details.

"RBS is currently examining all of its investments as part of the strategic review launched in the final quarter of 2008. This includes our investment in Bank of China," the British bank said in a statement.

Li, who presides over Hong Kong conglomerate Hutchison Whampoa Ltd and developer Cheung Kong (Holdings) Ltd, is one of the world's richest people, with a fortune that's been estimated by Forbes magazine at $26.5 billion.