(Yicai Global) Oct. 20 -- Shares of Western Securities fell after the Chinese brokerage said it had pulled out of the bidding for a competitor because its partner in the process failed to issue related documents in time.

Western Securities [SHE:002673] closed 3.7 percent down today at CNY7.97 (USD1.25), giving the Xi’an, Shaanxi province-based company a market cap of CNY35.6 billion (USD5.6 billion).

Western Securities, whose main shareholder is Shaanxi’s state-owned assets manager, announced on Sept. 27 the formation of a consortium with Beijing Financial Holdings Group to participate in the bidding for Beijing-based New Time Securities. Western Securities would have invested CNY13 billion to become the target’s controlling shareholder had the consortium won the bidding.

Founded in 2003, New Time Securities was taken over by China’s securities regulator in July last year following corporate governance issues. Last month, the regulator put 98.24 percent of the company’s equity up for sale at the China Beijing Equity Exchange for no less than CNY13.1 billion (USD2 billion).

The Western Securities-BFHG consortium was supposed to submit documents to the CBEX and pay the deposit by 5 p.m. yesterday, but Western Securities did not receive the internal decision-making file from BFHG, it said in a statement late yesterday.

Dongxing Securities, a unit of China Orient Asset Management, announced earlier this month that it would also set up a consortium with China Chengtong Holdings Group to take part in the bidding. The Dongxing-CCHG group is the sole remaining bidder for New Time Securities following the withdrawal of Western Securities.

The bid may fail, an industry insider told Yicai Global, adding that a deal may be done through transfer negotiations instead.

Editors: Dou Shicong, Futura Costaglione